Microsoft’s Zune writes about the new device and service which will rival iPod and iTunes:

Confirming weeks of rumors, Microsoft said it will launch music software and players under the Zune brand, though the software maker left plenty unsaid in its confirmation.

“Today we confirmed a new music and entertainment project called Zune,” Chris Stephenson, a general manager of marketing for the software maker, said in a statement. “Under the Zune brand, we will deliver a family of hardware and software products, the first of which will be available this year.”

The initial device will have Wi-Fi and use a hard drive to store music, Microsoft said. Stephenson’s statement also lent some credence to speculation that the company’s player will use wireless connectivity to share music with other Zune devices.

Michael Gartenberg adds:

So what’s the challenge? Essentially there are three things.

Creating a technically competent challenger – Arguably this is the easiest thing for them to do. Apple’s shown the way on what features the market wants. Less obvious are how Microsoft will differentiate with features like WiFi, that few mainstream consumers want and serve as a something that not only boosts for the bill of materials but also kills important features like battery life. Good news is the focus is on music and video. Despite the rumors, there’s no game functionality included according to MSFT (despite the team’s xbox heritage). That will make a big difference in terms of marketing.

Creating a lifestyle device – Microsoft is clearly going to face a battle here. It’s good that they’re building a unique brand and following the Xbox tradition, distancing themselves somewhat from Microsoft identity but that’s not enough. Zune isn’t a bad name (and yes, that’s the real name it seems although i did like Argo a lot better). It’s going to be hard for them to create the same level of cachet that Apple has with the iPod.

Creating a platform – iPod is more than a single device. It’s a platform in and of itself with a whole eco system of cases, car kits, speakers and docks. No doubt that MSFT will work hard to make sure that they fill some of the gap directly with first party stuff, but this is one area where consumer choice goes a long way in making the platform a success.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.