Call it King Kong vs. Godzilla, Part II.
The huge success of Apple Computer's (AAPL) iPod has drawn the attention of archrival Microsoft. (MSFT)
With the debut of its Zune music player, the software giant wants a piece of the growing market.
So which device is right for you?
As is the case with most tech purchases, it depends.
Apple has dominated the MP3 player market, garnering a 70% share.
"A number of companies have tried to present alternatives to the iPod, but Apple has proved to be too large, powerful and focused," said Samir Bhavnani, research director at Current Analysis.
Other Apple rivals are Creative Tech (CREAF) and SanDisk. (SNDK)
Apple's success has stemmed from several factors, starting with the product's design. The iPod is small, but can store thousands of songs.
Users also like the interface, including Apple's breakthrough Click Wheel, which makes it easy to manage a music library with one hand.
"Apple has long produced devices that offer simple navigation," said Dale Gilliam, a digital media analyst with market research firm Diffusion Group.
Marketing is another strong point. Apple created the right buzz about the product, turning the gadget into a must-have.
Since the product's launch five years ago, the company has been aggressive in fine-tuning and upgrading the iPod.
In October, Apple enhanced the device so that one click shuffles a music library before playback. And high-end models play video games.
The company also has fostered a rich ecosystem of add-ons and adapters that transform the device into a multipurpose gadget.
Apple signed deals with carmakers so the device can be plugged in on the go. Recently, Apple began working with Air France, (AKH) Continental (CAL) and Delta so that business travelers can more easily use the iPod when flying.
In addition, Apple and several outside manufacturers have developed over 3,000 accessories to make the device easier to carry and use.
More Features, Less Music
The Zune resembles the iPod in many ways. The two are similar in size and shape, though the Zune is thicker and has a bigger screen.
One of the Zune's most unusual features is its wireless networking, which lets you share songs, pictures and video with other Zune users. Copied songs will work on friends' Zunes up to three times or three days, whichever comes first.
Eventually, the feature could let you wirelessly use media stored on your home computer or even buy music directly from the device.
The Zune does have its shortcomings. Its capacity tops out at 30 gigabytes. The biggest iPods, while pricier, store more than twice that.
With the ability to store about 7,500 songs, 30 gigabytes might seem like plenty. But space can go quickly, especially when photos and video become part of the mix.
Because the Zune is new, few companies make add-ons. That could make it tough to use it in your car or with your home stereo.
And the Zune's nascent music store sells a limited number of songs and videos.
Uphill Battle
Because of these limitations, Microsoft faces an uphill battle.
"Microsoft will have to provide more compelling reasons for users to switch to Zune," Gilliam said.
History has shown Microsoft to be a formidable competitor willing to invest the time and effort to emerge as a top supplier in new markets.
Take its Xbox video game console. The first version was a strong debut, but failed to woo many from Sony's (SNE) PlayStation 2. The company pressed on with the Xbox 360, which is holding its own in the next-generation console war.
Will the Zune, a project headed by the Microsoft executive who oversaw the Xbox, do the same?
For now, only one thing is certain: This is one sequel worth watching.
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