Microsoft Releasing Multitouch Zune HD — And It’s Sexy

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Microsoft will release a Web-surfing, HD-video-playing, multitouch Zune in the fall to compete with the iPod touch — and the hardware actually looks pretty cool. But as Apple well knows, the gadget is one thing, the software and services are another.

Sporting a sexy metal case, the Zune HD will have a 3.3-inch, 480 x 272 OLED capacitive touchscreen display (16:9 widescreen); a built-in HD Radio receiver, and WiFi. The “HD” refers not to the touchscreen, but the HD radio and HD out (720p), though that’s only available with an optional cradle. Pricing was not released, and release is “early fall.”

“There’s a lot here that MSFT is doing well, especially when it comes to the hardware,” said Interpret analyst Michael Gartenberg on his blog.

Announced at the Wall Street Journal’s D7 conference, M$ offered no other details — CPU, storage, or most crucially, the software and services it will run. M$ promises more details at the E3 game show in Los Angeles next week.

According to the company, at E3 “attendees will see first-hand how Zune integrates into Xbox LIVE creating a game-changing entertainment experience.”

Yeah, right.

Microsoft is promising multitouch apps and games, plus a custom Web browser based on Internet Explorer — and there’s the first nail in its coffin right there! M$ says the Zune HD will offer better Xbox integration and a Zune marketplace, presumably something akin to Apple’s iTunes Music Store for buying apps, media and games.

But there’s the rub: M$ might be able to produce nice-looking hardware, but the iPod experience it is competing with is much more than a sleek gadget. It’s an App Store with tens of thousands of carefully-veted apps, a well-stocked media store, and an integrated hardware/software platform that is robust and reliable.

Apple has sold 13 million iPod touches since its debut in 2007 and December 2009.

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