Microsoft's Zune Picture Clears

Just how Microsoft ( MSFT) plans to challenge Apple Computer's ( AAPL) iPod line is becoming a little clearer.

Some specifications for the software giant's upcoming Zune digital-media player came out in a filing made with the Federal Communications Commission on Thursday. Among the details: Toshiba will make the device for Microsoft; it will have a built-in wireless networking antenna and an FM radio tuner; it will have a 30-gigabyte hard drive and a 3-inch screen.

In contrast, Apple's 30-GB iPod has a 2.5-inch screen and doesn't come with either an FM tuner or a wireless antenna. Users can, however, buy an FM tuner add-on for the iPod. And the company offers customers the choice of some six other iPod models.

A Microsoft representative confirmed that Toshiba will be manufacturing the Zune device and that the specifications in the regulatory filings are accurate. A representative for Toshiba did not return calls seeking comment.

CNET News.com first confirmed that Toshiba will be making the device for Microsoft.

As it's indicated before, Microsoft has big plans for the wireless networking feature. According to the filing, Zune users will be able to send songs, photos, playlists and albums to other Zune devices. And users will be able to act as a virtual disc jockey using a feature that allows them to stream music to up to four other Zune devices.

However, at least in this first iteration, it doesn't look like Zune users will be able to download songs and other media directly from the Internet to their device. Instead, a user manual included in the FCC filings indicates that they'll have to upload music, pictures and movies to the device from their computers when not getting them from other users.

Microsoft had given few details on the Zune to date, other than to confirm the existence of the project, the expectation that it will release its first Zune device later this year and that the new device and related music service won't be compatible with devices and services built by partners around its PlaysForSure digital media initiative.

The new documents don't give any details on the music service Microsoft will offer in conjunction with the Zune. However, the documents seem to indicate that the company's service will be based on a subscription model. That's likely the only way the company would be able to allow Zune users to send songs to each other without raising fears at the music labels about illegal copying and trading.

The Microsoft representative declined to say whether the Zune service would be subscription-based or otherwise or to give out more details about the device or service beyond what was in the regulatory filings.

Analysts have long argued that subscription services will eventually win out in digital music against a la carte downloads. But to date, Apple's iTunes, which sells songs without subscriptions, has dominated the legal digital-music market.

Still, Microsoft could pose a legitimate threat to Apple, if only for its deep pockets and legendary persistence. In efforts ranging from Web browsers to video games, the company has shown that it's not easily discouraged by short-term market setbacks.

Still, Microsoft's move represents one of the few times it's gotten into the hardware business. The company's most notable effort in that regard has been with its Xbox video-game division. While Microsoft is expected to gain share against market leader Sony ( SNE) with its new 360 console, the price thus far has been billions of dollars in losses.

At the close of regular trading Friday, shares of Microsoft were up 11 cents, or 0.4%, to $25.85, while those of Apple were up 94 cents, or 1.4%, to $68.75.

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