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Monday, November 13, 2006
Zune MP3 player Has a Lot of Catching Up to Do

Microsoft's sturdy Zune foot soldiers will march out in an improbable mission to topple Apple's world champion iPod MP3 player.

Zunes echoing iPod's design but steeped in Microsoft functionality instead of Apple panache will debut in stores on November 14.

Most industry analysts claims that Zune is either going to take off or it is not going to go anyplace.

"There is no middle ground. It is different enough that it could surprise Apple."

Each Zune has a 30-gigabyte media player and is priced at 250 dollars, on par with an iPod with an equal amount of memory space.

Music for the devices will be sold on the Internet at Zune Marketplace in a manner similar to the exclusive mating of iPod and Apple's online iTunes shop.

Zune players feature wireless technology; built-in FM tuners and three-inch (7.6-centimeter) screens.

Microsoft was trying to set Zune apart from other MP3 players by promoting the ability of the devices to connect wirelessly with each other so users could share music or play "DJ."

"They've got a single product with a single differentiating feature - sharing," said analyst Michael McGuire of Gartner Research.

"I think it's going to be more of an interesting social experiment at first rather than anything else."

A drawback is that shared songs are erased from borrowers' Zunes after three days or being played three times, even if only snippets of tunes are listened to.

Borrowers of songs aren't able to instantly buy sampled music with mobile links to the Internet.

"My ability to purchase songs on the spot becomes very powerful," McGuire said. "That is where this has to go. We are half way to super-distribution."

While iPods are "sleek and svelte," Zunes have rubbery shock resistant casings and oversized screens tailored for video viewing even though only music will be available.

Zunes were made in black, white or brown as compared to the array of bright iPod colors.

"It has a product that is nice looking but doesn't break any ground style-wise," McGuire said of Microsoft. "It is kind of odd. I would have expected them to leapfrog Apple."

Microsoft has aggressively courted musicians and recording studios, going so far as to promise Universal Music Group a portion of Zune player sales revenues.

Apple has focused on consumers in a strategy that made iPods a "cultural fetish" and the most popular MP3 player on the planet, according to analysts.

Catering to content providers could be critical when the Redmond, Washington, technology giant inevitably shifts to selling films and television shows for Zune players, analysts said.

Zune is not only taking on iPod, it will compete with MP3 players made by Samsung, Creative and other companies that allied with Microsoft in its attempt to dethrone the iPod once before with PlaysForSure music service.

Microsoft-led PlaysForSure brought together MP3 makers and online music stores from Internet firms including Yahoo and Rhapsody.

"Microsoft basically threw them under the bus," McGuire said of Microsoft abandoning PlaysForSure allies and recasting itself as their competitor.

The lone Zune model will be competing with Apple offerings ranging from a matchbook-size iPod shuffle to a movie-playing iPod with 80 gigabytes of memory. Most cars made next year will be iPod compatible.

Zune lacks games, clocks and other iPod features.

The iTunes store has a selection of approximately 3.5 million songs for sale at a dollar each while Zune Marketplace claims an inventory of two million.

"I don't think we are going to see people lining up for Zune the same way they lined up for an Xbox," analyst Michael Gartenberg of Jupiter Research said, referring to Microsoft's video game console.

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