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Confirming weeks of speculation, Microsoft (NSDQ: MSFT) announced Tuesday that a new Zune, with a touch screen, high-definition video, and a…

imageConfirming weeks of speculation, Microsoft (NSDQ: MSFT) announced Tuesday that a new Zune, with a touch screen, high-definition video, and an internet browser, is coming to market in the fall. The company isn’t pulling any punches about the device it’s trying to position the new “Zune HD” against: the iPod Touch. “This device is created to go head to head with the iPod Touch,” Chris Stephenson, general manager of global marketing for Microsoft Zune, tells CNET in an interview. To distinguish the two devices, Stephenson said Microsoft would emphasize the new Zune’s HD radio feature, which will let users listen to radio in higher quality than via traditional radio services. The iPod Touch does not come with a built-in radio.

Microsoft also said that the Zune service would soon be coming to Xbox Live. It appears that for now only the Zune’s catalog of videos and TV shows — which will replace the current Xbox video marketplace — is coming to the gaming console. Microsoft says the arrangement will bring the “Zune brand experience to millions of new consumers for the first time.” In the past, the company had hinted that Zune services were coming not only to the Xbox but to mobile phones as well. However, Stephenson tells CNET that it will be at least a year before the Zune service comes to the phone. Microsoft is expected to announce more of its plans for the Zune at the E3 gaming conference next week.

It’s no secret, of course, that the Zune hasn’t exactly been a consumer hit for Microsoft. The company has persevered, emphasizing Zune-related services, like its music store and ZunePass subscription service, while also promising that a new device was in the works. With this third version of the Zune device, though, Microsoft will not only face stiff competition from the iPod but also from smartphones like the iPhone, which people are increasingly using to access their music collections.

By Joseph Tartakoff

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  1. I know of no person that owns a Zune. And if I did, I would laugh at them.

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  2. Saying that "Zune HD will compete head-on with iPod Touch" doesn't mean it's a viable alternative. The Zune HD will be sold on close-out for 75% off within six months of general availability. At that price, it'll be a great block to put under the wheels of the Microsoft commuter buses so they don't roll away!

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  3. HD Radio is not "higher quality" than traditional FM radio. The HD originally stood for Hybrid Digital, but it might not be a coincidence that it shares the same initials of High Definition TV. Hybrid Digital radio often uses a compression rate that makes it "lower quality" than FM, plus it is more susceptible to drop-outs than the graceful degradation of analog radio signals.

    HD is digital, however, so that makes it … digital.

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  4. The new Zune looks nice, but there are several setbacks that will affect it negatively, i think.

    1. No App store
    2. Way too late in a market that everyone knows Ipod touch and no one knows Zune
    3. an MP3 player is so much more than a device that plays audio and video, Zune does not seem to realize this.

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  5. I can't wait! the soul purpose i won't buy an IPOD is the fact i have to install Itunes to use the thing. This is also big for the Xbox 360 owners.

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  6. I was thinking about getting the pod touch. But You have to use itunes. And it just makes my pc run like a handicap. So I don't want to outfit my pc to run specifically for itunes. I am chill with the Zune software. I want more support for zune though like ipod.

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