Microsoft Getting Under Apple's Skin

Arguably, the attractiveness of the Zune device could be the most important factor in determining the success of the initiative. Many observers believe Apple's success in digital music is largely linked to the cutting-edge fashion and ease of use of its iPods, as opposed to its iTunes service.

And the accessories that consumers have bought to outfit their iPods -- ranging from simple cases to external speakers and car-radio connectors -- could be another factor discouraging consumers from switching to Zune, says Gartenberg.

"This is a really tricky situation," he says. "If you own an iPod ... you're not likely to be in the market for a new player here. If you are, you're going to be looking at what Apple has to offer first."

Apple has long dominated the digital music space. Its iPod players have captured 75% of the retail market share for such devices in the U.S. and are the leading players worldwide, according to industry research reports. Meanwhile, the company's iTunes music service holds north of 80% of the market for digital song purchases in the U.S., according to Nielsen SoundScan figures quoted by the company.

Songs purchased from iTunes can only be played on Apple's iPods. Likewise, the iPods can't play songs encoded in Windows Media format.

Gentes said that Zune will work similarly, although she declined to comment on whether Zune devices would be able to play iTunes songs.

In contrast, songs bought from PlaysForSure-affiliated services will play on any approved device, no matter the manufacturer.