Low-price Zune to challenge Apple iPod

It is hardly news that Microsoft (MSFT) cannot sell its Zune with any success because of the dominance of the Apple (AAPL) iPod. It doesn't seem to matter what new features Redmond adds to the multimedia player. Consumers still ignore it.

Microsoft is now hoping that price cuts will do what new features could not. The new 16-gigabyte model of the Zune HD will be priced at $219, which is $80 below the comparable iPod. The 32-gigabyte model will be priced $110 below its iPod competition.

The new Zune will run high-definition video and HD radio, but it is hard to say whether that will matter to anyone. Watching high-definition content on a small screen may not be much of a benefit.

The Zune has almost no chance of changing Microsoft's fortunes in the media player market, but Redmond was never supposed to create a search engine to challenge Google (GOOG), and Bing changed that.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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