The new social.

Microsoft finally announced the much anticipated follow-up to the Zune, tentatively called the Zune 2. That’s not what they’re really calling it – they’re actually naming the new units by their capacity (the Zune 4, Zune 8, and Zune 80 – the original model will be known as the Zune 30). There are some pretty cool upgrades both to the hardware and software side of Microsoft’s MP3 player which I’d like to discuss. Honestly I haven’t been very excited about Apple’s iPod lineup lately aside from the iPod Touch, but even that’s hard for me to justify. I’m glad to see Microsoft is stepping it up and, who knows, if the Touch doesn’t receive a price drop or capacity upgrade sometime soon I might just end up picking up an 80 gigabyte Zune instead. Let’s get started.

The most noticeable upgrade to the Zune 2 is the fact that there are now 2 different skews of the model – a larger hard drive based unit that is similar in size and look to the old model and new flash based models which are smaller, much like the 2nd generation iPod Nano. The smaller units come in 4 and 8 gigabyte capacities while the hard drive model has been upgraded from 30 to 80 gigabytes, showing that Microsoft is trying to compete with Apple’s most popular iPod models. There were also some physical changes to the Zune line-up, most notably a new scroll button called the "Zune Pad" which is touch sensitive and lets you flick through your content. Also, in the case of the Zune 80, the player has been made 27% thinner.

As far as the software goes, Microsoft is starting from the ground up. The Zune Marketplace is being completely overhauled by adding audio and video podcast support and new DRM-free songs. They’re also giving their users access to a new feature called the Zune Card. Zune Cards are much like Xbox Live gamercards which show what you’ve been playing except they work for what’s been playing on your Zune. Therefore you can place a web badge on your site, MySpace/Facebook page, blog, anywhere really and let people know what you’ve been listening to. Along with this Microsoft is launching a community specifically for the Zune. Finally, and this is a big one, they’ve finally made the wifi do what we all want it to do – Wireless Sync. Now you can bring your Zune into your home, connect it to a power source (this is done for stability, so your battery doesn’t die in the middle of a sync for example), and automatically your content will be moved wirelessly to your Zune. This is a feature that even Apple hasn’t been able to execute yet. In addition to the wifi upgrade they’ve enhanced the wifi sharing feature, letting the songs you share remain active for longer than the 3 days from before. You still only get 3 plays with licensed music, but for content like podcasts you can share them with your friends and they can keep them for how ever long they like. It’s pretty cool. Also, did I mention that if you’re already a Zune owner all of the software upgrades will work with your current Zune? That’s right. Microsoft is going to release a firmware update for the Zune 30 that will unlock almost all of this functionality. This is an awesome move on Microsoft’s part, move that you would never see Apple make. I guess when you only have 2% of the market you value your current customers just as much as your potential new ones.

So now that I’ve hyped the dang thing up so much how much does it cost? Well, the 4 gigabyte model will be $149, the 8 gigabyte model will be $199, and the 80 gigabyte model will cost $249. If you keep track of iPod prices you can see that they’re almost exactly the same as the prices of comparable iPod units. At this point I think they should have undercut the iPod a little bit, maybe by $50 or so, in order to gain market share. It’s almost like when they were newcomers to the gaming console market with the original Xbox – the key goal is to gain market share (as opposed to profit). Still, given the upgrades I think the prices are reasonable.