Microsoft rolls out new Zunes

By Daisuke Wakabayashi

REDMOND, Washington (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) introduced on Tuesday three new models of its Zune digital media player that wirelessly and automatically update their music, photos and videos when placed near a user's computer.

They mark the second generation of Microsoft's answer to Apple Inc's (AAPL.O: Quote, Profile, Research, Stock Buzz) iPod, which has sold more than 100 million units in various shapes and sizes since its 2001 launch.

By comparison, Microsoft joined the fray last year with a single 30-gigabyte Zune model and has sold 1.2 million units.

The new Zunes will come in 4-gigabyte, 8-gigabyte and 80-gigabyte models. All will come with a feature that allows a user to automatically sync media via a WiFi network from a PC to the Zune when its battery is charging.

Microsoft also aims to tap the social-networking phenomenon with Zune Social, a Web site for users to display music they like, share playlists and find friends with similar tastes.

The new devices, set to go on sale in mid-November, are equipped with a circular navigational pad that allows a user to both "flick" through options like on a touch screen or "click" through choices.

The 4-GB model will go on sale at $149, the 8-GB Zune will cost $199 and the 80-GB model will sell for $249. Those prices are the same as similar-sized iPods.

Analysts said the next-generation Zunes are necessary to keep existing users happy, though the new devices are not enough to close the gap on Apple.