Struggling to keep up with iPod and Apple, Microoft on Thursday announced the release and cost of its Zune digital media player and online music store, Zune Marketplace.

"On Nov. 14 we're delivering not only a device, but a shared, social experience that will be shaped by the collective imagination of consumers," said Chris Stephenson, general manager of global marketing for Zune. "We're infusing the spirit of discovery and sharing into everything we do �� from the experience we crafted around the device and service to pre-loading music and videos on every device to expose people to something new."

The Zune looks like the iPod, inside and out. It will be sold at a cost matching Apple's popular digital music player. The Zune device will retail for 249.99 U.S. dollars and the Zune Marketplace service will cost about 99 cents for a song, similar to prices at Apple's iTunes.

Emphasizing quality and with no intentions to start a major price war to gain market share, Microsoft with its Zune pricing is ready to bear the loss in this holiday season.

"We had to look at what was in the market and offer a competitive price," said Scott Erickson, Microsoft's senior director of product marketing for Zune. "We're not going to be profitable this holiday but the Zune project is a multiyear strategy."

Zune, whose retail price is 99 cents more than the iPod with the same amount of storage, will create new ways for entertainment fans to connect and share media experiences device-to-device through the use of wireless technology and new software scenarios, the Redmond company, said.

"It's not going to be price that really drives people to Zune," saids Michael Gartenberg, an analyst with Jupiter Research. "It's going to be the quality of the device and the quality of the experience that will make consumers' decisions. The price is a wash."

Microsoft said the Zune player comes with a 30GB hard disk, 3 inch screen, FM tuner and wireless connectivity, and will give consumers an incredible entertainment experience right out of the media player.

Zune users will also have access to an array of optional extras, such as a car pack that includes FM transmitter with AutoSeek for 99 dollars and the Zune Car Charger, a travel pack also for 99 dollars that includes the Zune Dual Connect Remote, Zune Premium Earphones, Zune Gear Bag, Zune Sync Cable and Zune AC Adapter. A home pack at the same price includes AV Output Cable, Zune Dock, Zune Wireless Remote with Lithium Battery, Zune Sync Cable and Zune AC Adapter to hook the Zune player into the home TV and stereo systems.

Zune Marketplace will offer both a subscription service and the ability to purchase music and videos. Microsoft has announced that it will sell a music subscription pass for 14.99 dollars a month, enabling users to listen to any of the songs available on Zune Marketplace.

Users can purchase songs individually using Microsoft Points, for 79 points per track. Microsoft Points enables users to buy packages of points of 1,200 for 15 dollars, 2,000 for 25 dollars, and 4,000 for 50 dollars. A song costs 79 points, equivalent to 99 cents, the same as Apple's iTunes.

The points can also be used to purchase other Microsoft products. Microsoft Points is similiar to a prepaid phone card, a stored value system that can be redeemed at a growing number of online stores, including the Xbox Live Marketplace.

Japanese electronics maker Toshiba is under contract with Microsoft to manufacture the Zune.

No details of pricing and release for the Australian, Europen and other non-U.S. markets are yet available.

Source: Xinhua/agencies