The good news for Microsoft is that its Zunes are priced right in line with Apple's new iPod Nano and iPod Classic line. From either company, a 120GB hard drive player fetches $249, a 16GB flash model sells for $199, and an 8GB flash model will sell for $149.
The bad news is that once again, Apple has made life harder for Microsoft--adding features like voice recording and "shake to shuffle" to the Nano. Apple's "Genius" feature, while not as expansive as the Channels feature of the Zune, also gets Apple in on the auto-recommendation game.
Apple is also moving ahead on the video front, whereas the Zune didn't make any meaningful advance. The new iTunes features TV shows in HD and Apple is bringing back NBC, erasing the only real video advantage the Zune had.
And of course there is the iPod Touch. Microsoft has decided to ignore the Web browsing feature even though all its models have Wi-Fi. That means that at the lower end of the market Microsoft has an advantage, as all its models can now download songs over Wi-Fi. But at the high-end, Apple has a player that makes far more extensive use of the wireless connection.
And that advantage is only growing as more applications are being written for the iPhone and, thus, the iPod Touch. For example, Apple demonstrated games such as Spore running on the new iPod Touch. The new Zunes do come with two games, but they sound more like the kinds of games Apple had for the Nano line some time ago.
Plus, the iPod Touch's Wi-Fi-based iTunes store will work in more places than the Zune Marketplace store built into the Zune. The Zune can only download music over Wi-Fi connections that are open and don't feature any kind of browser hijack--an increasing rarity at public Wi-Fi spots that, even if they don't require payment, want users to agree to their terms of service.
Update 11:10 a.m. PDT: Well, Apple's event has ended. As CNET News reported earlier, a rumored subscription service was not part of the mix. That leaves Zune with a key difference to tout. Subscription music is more than just a feature in the Zune world. It's what makes its music discovery features make sense. For example, new to the Zune are channels, such as Billboard's top hits. Getting those channels, either the preprogrammed ones or the custom ones based on a user's own collection, make the most sense with a subscription in which a user can add those tracks without having to purchase them one by one.