Zune HD May Have More Features Than the iPod, But Are They the Right Ones?

zunehdMicrosoft (s msft), after months of anticipation, today launched its latest digital audio player, the Zune HD. It’s a complete revamp of the device’s previous versions — it utilizes a bright OLED touchscreen, adds a web browser and HD radio tuner, and runs on a new Tegra processor from Nvidia (s nvda). But while Microsoft hopes to “out-iPod” the Apple (s aapl) line of audio players with some extra features, the question isn’t “Which device has more features?” Rather, it’s “Which device has the features that consumers want most?” More importantly — will Microsoft eventually fold its Zune platform into Windows phones?

I haven’t used the new Zune HD yet, although a review unit is on the way. However, I did purchase the original Zune back in late 2006. In fact, I suspect that I’m one of the few people that owned a Zune before owning an iPod. I thoroughly enjoyed the Zune Pass music subscription that the Zune hardware supports; spending $14.95 a month to rent music was a deal that Apple wasn’t then able to match. That deal sounds even better now — Microsoft includes 10 MP3 downloads a month at no extra charge. But iPod owners who crave musical variation now have plenty of options, too, courtesy of the iTunes App Store; even Real Network’s (s rnwk) Rhapsody To Go service was recently greenlighted by Apple for availability there. Meanwhile, Pandora and Slacker offer millions of available tracks to stream. The key difference here is that those require real-time connectivity while the Zune device can store rented music for offline enjoyment.

Both, however, are capable of viewing videos in addition to playing music. ZuneHD owners will enjoy brighter and more vibrant video content than iPod owners thanks to the OLED display used by Microsoft. However, those same Zune HD owners will struggle to use their device outdoors — OLED displays appear washed out in direct sunlight. Aside from different display technologies used, the iPod Touch offers a bigger screen with a higher resolution — it uses a 3.5-inch display at 480×320 pixels, while the new ZuneHD is 3.3 inches at 480×272. On a small screen, those missing 48 lines of resolution aren’t that noticeable and Microsoft figures they’ll make up for it by trumping Apple on larger, high-resolution external displays.

Each device can use an optional A/V dock, but the Zune HD can output high-definition video at 720p through its dock, while a docked iPod can only push content at 480p. Here again, Microsoft beats Apple in technical specifications, but unless consumers plan to carry portable HD content and connect to an HDTV, the point is lost. Eventually, I believe that could happen — I proposed such an idea nearly four years ago — but most households already have several options to get HD content on the big screen. How many of them will need a mobile one, too? (For a hands-on demo of the device’s video capabilities, see the video made by Liz and Chris over at NewTeeVee at the bottom of the post.)

Speaking of connectivity, Microsoft has kept Wi-Fi in the Zune line. This time however, it’s far more useful. The original Zune limited Wi-Fi use to “squirting,” or sharing music from one Zune to another; Microsoft later added the ability to sync music wirelessly from a PC. Now it’s included a version of Internet Explorer for web browsing, bringing the Zune HD closer to Apple’s iPod touch and its mobile Safari browser.

Which brings us, of course, to the big question: Will Microsoft eventually meld the Zune and Windows Phone platforms into a stronger competitor to Apple’s iPhone? The opportunity is there, but it appears Redmond isn’t quite ready. On Oct. 6, handset makers will officially unveil Windows Mobile 6.5 devices and no Zune integration is expected. But Windows Mobile 7 is due in 2010, which leaves the door wide open for a Zune Phone. Such a device would have to offer the best features from both the Zune and Windows Mobile platforms to compete with the iPhone juggernaut. The Zune bits would bring entertainment value to the handset, while the large array of Windows Mobile software titles could instantly create an vast “app store” for the Zune brand. Zune will have a marketplace at launch, but the titles are few. Clearly, consumers crave apps, so why not leverage the tens of thousands created for Windows Mobile?

While Microsoft has clearly matured the Zune HD from its humble beginnings, the extra features are unlikely to have Apple scared. So far, while Cupertino offers fewer features, the market is proving that they’re the right features for today’s consumers.

[blip.tv http://blip.tv/play/AYGgpQEC]