Preview: Microsoft Shows Innovative New Zune Software

— -- Microsoft quietly announced its third-generation Zune MP3 players and software this week, news that got lost amidst the din of Apple's "Let's Rock" event. As expected, Microsoft will offer a new 120GB hardware model and a 16GB flash model in new blue-on-silver and all-black color schemes. The models will be available for purchase on September 16; the Zune 3.0 media player software for Windows will be available for download that same day, and will work with all generations of Zunes.

A firmware update will also be available for first- and second-generation Zunes (third-generation firmware is preinstalled). The new models will replace the existing 80GB Zune and 4GB Zune (same as the 8GB Zune that PC World reviewed last year), which will continue to be sold at $230 and $130 respectively until they sell out. The 120GB Zune sells for $250, the same price as Apple's new 120GB player.

Microsoft hopes to outshine its competition by offering innovative ways for customers to discover music. Both Zune models integrate an FM tuner--a feature that no Apple iPods have. The Zune takes advantage of its tuner and its built-in wireless connectivity with its new "Buy from FM" ability. Have you ever heard a terrific song on the radio but failed to figure out the title and artist? Buy from FM will make tracking it down easy: Just tag the song you like, enter a Wi-Fi hotspot, and immediately purchase and download the song. If Wi-Fi isn't available, the Zune sets up a queue of songs you tagged ready for download.

Another appealing new feature of the Zune 3.0 software is MixView. Zune's MixView is Microsoft's answer to Apple iTunes 8's new Genius ability to generate playlists automatically. I saw a preview of MixView this week, and found it a visually stunning way to listen to and find new music.

For example, if you pick an album or artist in MixView, images of related content will blossom around it. Click on one of the surrounding images, and a new display will appear. Double-clicking on the image allows you to hear the full song and to purchase it.

Images of like-minded listeners from the Zune Social community will also pop up along with the recommended music. Connecting music fans to one another is a nice personalization feature. Like Genius, MixView makes recommendations based on songs within your library and the online store (the Zune Marketplace in this case, versus the iTunes Store for Genius). But the Zune algorithm engine also draws from the Social community, an element that Genius lacks.

Unfortunately, both Buy from FM and the full MixView experience--the coolest new Zune features--are available only to Zune Pass subscribers for $15 per month. Nonsubscribers can use MixView, but can hear only 30 seconds of the song.

Available to nonsubscribers is a new section in the Zune Marketplace called Picks, which suggests albums, artists, and tracks based on music the user has been listening to. It's also a way for users to keep up-to-date on new songs from their favorite artists.

Ultimately, Zune seeks to draw in new customers and iPod converts through its software. Zune 3.0 is a free download (Windows only) and many of its features are available to nonsubscribers and device owners. If you're tired of your current desktop media player, the Zune 3.0 player will be worth downloading if only for its nifty visual effects.

Zune 3.0 is certainly more aesthetically pleasing and offers a greater array of opportunities for music discovery and social interaction than iTunes 8. Considering that the iPod currently holds 70 percent of the MP3 player market, however, the new features alone are unlikely to be enough to make Zune an actual threat.

Coming next week: PC World's reviews of the new Zune 120GB and 16GB devices, and the Zune 3.0 software.