Microsoft upgrades Zune players to challenge Apple iPods

Microsoft is upgrading its Zune line and testing a website where owners of the MP3 players can socialize as the technology giant strives to wrest market share from Apple's beloved iPods.

Zune models featuring touch-sensitive navigation buttons instead of track wheels, wireless synching to home computers and more ability to transmit music wirelessly between Zunes, will be in stores next month, Microsoft said.

"Twenty years ago we bet the company on an integrated productivity suite of word processing, spreadsheets and presentations, and we changed the way people work," Microsoft chairman Bill Gates said while unveiling new Zunes on Tuesday.

"Today, we're making big bets on games, music, and video and connecting these entertainment experiences to help change the way people play."

Microsoft has three new Zune models. A black Zune with 80 gigabytes of hard drive memory and a 3.2 inch screen is priced 250 dollars (US).

Colorful "ultra-portable" Zunes with flash memory are priced 150 dollars for a four gigabyte model and 200 dollars for eight gigabyte versions.

The devices are the first additions to the line since the original 30-gigabyte Zune debuted in November of last year with a price of 199 dollars.

"It's a nice evolutionary development to the product line," said Jupiter Research analyst Michael Gartenberg.

"The real challenge is winning the hearts and minds of consumers. The iPod has gone from being a music player to being a cultural icon. This is going to involve the cool factor and Microsoft isn't known for being a cool company."

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