iPod challenger? Microsoft Introduces Zune HD

Redmond's MP3 player goes hi-def. Should Apple be worried?

On the heels of Apple's (AAPL)  iPod event last week, Microsoft (MSFT)  is unveiling its latest offering in the MP3 player market, a sleek high-definition device capable of playing HD movies and HD radio known as, appropriately, Zune HD.

Available in 16GB and 32GB versions at $220 and $290, Zune HD features a vibrant organic LED color screen with multi-touch technology. Retail outlets will sell both platinum and black versions, while several other colors will be available at Zuneoriginal.net. It's Wi-Fi enabled with a web browser, so movies and music can be downloaded on the go or at Zune.net. The company was planning to have as many as 500 HD (720p) movies available for rent/sale by today. It also plans to feature a few free applications  at launch in the Zune Marketplace, including a calculator, weather, and some games. In the next few months, apps for Twitter and Facebook  will become available, as well as several 3D games including Project Gotham Racing.

Microsoft  has enjoyed some impressive early reviews for the product, which is clearly aimed at Apple's iPod Touch device.

Jose Pinero, Microsoft's director of communications for Micrsoft's TV, video, and music business, thinks the combination of HD radio, a new Smart DJ feature, and more than 6 million songs available in the Zune marketplace (for a monthly subscription fee of $14.99) will be a revelation for music fans.

Music lover's device?

"It's not about doing 40 different things," Pinero says. "If you love music and video, this offers the riches experience you can get."

He also emphasizes that this is hardly a self-contained device. Come November, the Zune video store will be available to 20 million Xbox Live subscribers. It'll work as both a gaming device and the larger version will hold up to three HD movies. "You can buy a movie through Xbox Live, and it's instant-on. You can start watching the movie, sync to your Zune, and finish watching it at the gym," he says. "You can watch it on your TV, in your living room, on your PC, or your portable device. It's buy once, play anywhere."

The device's Smart DJ feature will also work over the Internet, so Zune Pass subscribers can log onto Zune.net at a friend's house and still access the extensive song catalog and recommendations.

Put it all together and it appears to be an impressive product release for Redmond.

The Zune HD looks great, has an impressive web browser and some cool new features, and will soon plug into Xbox Live service. So, it'll no longer be an embarrassment to be seen carrying a Zune. It's not unusual for Microsoft to take this long to get a product right. The question is whether this time, the market has truly moved on.