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Microsoft's New Zune Says 'We're No iPod'

Ivy Lessner

The new models were rolled out a day before Apple(AAPL Quote) is expected to launch its new iPod models in time for holiday sales.

Microsoft had sold 2 million Zunes as of July since the player's launch in 2006, compared to 100 million iPods sold since its first release in 2001. Apple sold 10.6 million iPods in the first quarter of 2008.

But the key to Microsoft's announcement focuses less on new models and more on the Zune's social-networking software, with features that allow users to see what music is hot with friends and people with have similar tastes. Apple does not have a social site comparable to Microsoft's social.zune.net.

The top of the Zune line got bigger, now at 120 gigabytes for a black-on-black model. It will retail for $250 -- the former price of the 80-GB model, which will now sell for $230. Microsoft has also added a 16-GB model, also black on black, at $199.

Differentiating the Zune from the iPod, Microsoft has written downloadable software, called Marketplace, to fill out its music-discovery capabilities, which users put at the top of their wish lists, says Adam Sohn, public relations director for Zune.

The Zune can now browse music stores without first connecting to a PC and can stream music without saving files, Sohn says. Microsoft also added the ability to do two-way synching between the player and the PC. Previously, the player just downloaded selections; now users can upload from the PC to the player.

Suggestions for music pop up on Marketplace when a PC is connected to the Internet and a synched Zune is playing a user's selection. This feature, called Mixed View, provides a multi-dimensional discovery capability, similar to those provided by Pandora and Rhapsody.

"We program in relational data" on music that shares influences with other sounds, Sohn says. Mixed View is free and some of its software features can be used without a Zune.

Picks and Channels features were also added to the software to analyze a listener's interests and build a specialized music selection based on similar listeners' playlists.