Similar to how Apple's iPod touch came from the development of the iPhone, Microsoft reportedly plans to base the follow-up to its Zune HD media player on the Windows Phone 7 Series mobile operating system.
For an extra $80, iPhone users can add an external receiver that will allow the device to receive HD radio, adding one of the features of the competing Zune HD; and VoIP application developers still await 3G support.
How can new competitors rival Apple's existing library of 75,000 mobile apps and installed base of 50 million users? Microsoft's approach with the Zune HD relies on overt adware, an approach Apple has deliberately avoided.
Apple makes its money selling hardware while Microsoft's revenues are from software. Yet in the mobile device war heating up between the iPod touch and the Zune HD, Microsoft is focusing on hardware features while Apple is shifting its marketing attention toward the iPod's vast library of third party software, particularly games.
Just when you thought Microsoft had given up on the Zune as a product and had retreated to referring to it as a nebulous cloud of conceptual features, the company comes out with a new device supporting a mobile-optimized OLED screen, a wildly powerful yet super efficient new multi-core Tegra graphics processor and support for high definition radio. The problem is that none of those things are actually true.