Zune details unzipped

Microsoft’s 30GB Zune digital-media player will sell for $249 when it hits store shelves on Nov. 14, the company said Thursday as it released more details on the device.

The Zune’s price will put it in direct competition with Apple Computer’s latest 30GB iPod, which also costs $249.

To introduce the companion Zune Pass music service, the device will come preloaded with songs, music videos and film shorts from the store. A Zune Pass will cost $14.99 a month, or $44.97 for three months.

“It’s clear that we are not going to see a pricing war at this predictable moment. They are not going to undercut Apple’s prices. But given the lack of volume discount and the screen size and the Wi-Fi capability included on it, $249 is still an aggressive price point,” said Michael Gartenberg, research director at JupiterResearch.

There will also be the option of purchasing individual songs through a system called Microsoft Points. The new Microsoft cash system will work by adding money to an account, as with a prepaid phone card. Points will then be deducted from the account with each purchase. A single song will cost 79 points, “the equivalent of 99 cents,” according to Microsoft spokeswoman Kyrsa Dixon.

The point system is already used in the Xbox Live Marketplace, and Microsoft plans to host other online stores where Microsoft points can be redeemed, according to Katy Gentes, product marketing manager for Zune. In the United States, points are available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000. That makes $1 worth about 80 points.

Gentes said this system will enable Microsoft to sell retail gift cards of Microsoft points that could then be split over different Microsoft online stores. It will also act as a common global currency for Microsoft products, according to Gentes.

Microsoft said Zune software will play files in several popular formats, including the AAC format used by Apple’s iTunes software.

Full article: CNET News.com