New 'Zune' to challenge iPod

SEATTLE (AP) — Microsoft Corp.'s effort to compete against Apple's iPod juggernaut will focus on the idea that people want to be able to easily share music with friends and others.

The software maker said Thursday that its portable Zune media player, scheduled to be available around the holiday season, will include wireless technology to let people share some of their favorite songs, playlists or pictures with other Zune users who are close by. Those users can listen to the songs three times over three days before deciding whether to purchase it themselves

"The idea is to legitimize peer-to-peer sharing in a healthy way that works for everybody," said J no period Allard, a Microsoft vice president

Microsoft said the song-sharing capability will be available for most songs available through its forthcoming Zune Marketplace service, although some music publishers won't allow it.

Also, for now at least, users will not be able to buy the songs directly through the device. Instead, they can flag the song and purchase it next time they connect the device to a computer and access the online music store.

Analyst Ted Schadler with Forrester Research said he thinks Microsoft has assembled a strong product with many features Apple's iPod has, and some — such as the wireless feature — that it doesn't.

Still, he questioned whether music-sharing would be enough of a draw to get people to switch allegiances.

"I'm not going to change my mind about which product I own for that feature," he said.

The company did not disclose pricing or a specific launch date for the first Zune player. The device, to be made by Toshiba Corp., will have 30 gigabytes of memory (enough to hold about 7,500 songs), a 3-inch screen and a built-in FM tuner. It also will come loaded with about 25 songs or other pieces of content.

Allard said the device is based on Toshiba's Gigabeat handheld music player, but customized to include such things as the wireless capabilities.

Microsoft's Zune Marketplace music service, designed to compete with Apple Computer Inc.'s iTunes store, will let users buy songs individually or listen to unlimited tracks for a flat subscription fee.

Analyst Phil Leigh with Inside Digital Media said he thinks Microsoft may be able to gain an edge by offering a subscription service. Other companies offer such unlimited plans, but Apple doesn't.