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Originally published September 14, 2006 at 12:00 AM | Page modified September 14, 2006 at 4:01 PM

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Microsoft unveils Zune media player, music service

By the holidays, Microsoft expects to have a 30-gigabyte digital media player available in black, brown or white with FM tuner, wireless connection and 3-inch screen.

Seattle Times technology reporter

Microsoft this morning officially unveiled Zune, its entry in the portable digital music and entertainment market dominated by Apple Computer's iPod and iTunes.

"The digital music entertainment revolution is just beginning," J Allard, who is leading the Zune effort at Microsoft, said in a statement. "With Zune, we are not simply delivering a portable device, we are introducing a new platform that helps bring artists closer to their audiences and helps people find new music and develop new social connections."

By the holidays, Microsoft expects to have a 30-gigabyte digital media player available in black, brown or white with FM tuner, wireless connection and 3-inch screen. A complementary music service, Zune Marketplace, is billed as "the foundation for an online community that will enable music fans to discover new music."

The wireless connectivity will allow users to share full-length songs, play lists, pictures and other content from device to device. Users will be able to listen to a shared song for up to three times over three days.

"If you like a song you hear and want to buy it, you can flag it right on your device and easily purchase it from the Zune Marketplace," Microsoft said.

The Marketplace will allow both à la carte and subscription purchase models for buying music. Also, Zune devices will come preloaded with music from record labels including DTS, EMI Music's Astralwerks Records and Virgin Records, Ninja Tune, Playlouderecordings, Quango Music Group, Sub Pop Records, and V2/Artemis Records.

Microsoft also unveiled a set of accessories that will be available at the launch of Zune, including a car pack and a home package designed to allow integration with home stereo speakers and television.

The company also announced a list of third-party vendors that will provide accessories for the player, including Altec Lansing and JBL.

Microsoft said the software running Zune's hard-drive-based system will be updated to add greater functionality in the future.

Rumors of Zune started flying around the music industry earlier this year. Microsoft had previously provided scant detail about Zune, other than to confirm that it was in the works and targeted for release this year.

Robbie Bach, president of Microsoft's Entertainment and Devices Division, told financial analysts in July that the company would spend hundreds of millions of dollars over the next several years on the media player. That investment pales in comparison to the billions Microsoft spent entering the video-game-console business with its Xbox product line.

Bach said at the time the first device in the Zune line would come out in the fall in the U.S., and the company was planning to expand to additional countries and debut more devices in 2007.

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Bach tried to set realistic expectations about Zune and its underdog status.

"This not a six-month initiative, and somehow in six months we're going to have captured the marketplace," he said in July. "This is something that's going to be a three-, four-, five-year investment horizon."

Apple CEO Steve Jobs predicted in January that Microsoft would enter the digital music player market this year. His company has a sizable lead, controlling more than three quarters of the $4 billion U.S. media player market.

On Tuesday, Jobs announced a refreshed iPod line, lower prices, additional features and movie downloads through the iTunes store. He also showed off a set-top box that would allow users to stream digital content from the computer to the television.

Zune is an initiative Microsoft would have started sooner if the 71,553-employee company could have spared the resources, Microsoft CEO Steve Ballmer said at the same July financial analysts event.

"Frankly, we took some of the top folks out of the Xbox 360 effort, and right after 360 shipped that became the Zune team," Ballmer said. "I wish we would have done it earlier. We just didn't have the right talent capacity at the time."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

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