Microsoft updates Zune targeting iPod – eventually iPhone too?

Microsoft is famous for losing the initial battle but winning the long, drawn-out war. And while Apple’s combo of the iPod and now iPhone may seem an insurmountable competitor, Microsoft today released a major upgrade of its Zune device and software to more directly compete with Apple, amid rumors it may also have a “Zune-phone” in the offing soon as well.

Microsoft is already on the second generation of hardware for its Zune player, which, like the iPod, delivers music, podcast and video playback. Microsoft has lagged behind Apple on the software front; its Zune software up to now has not offered movies or TV shows for sale, although it does offer a subscription-based music service, something Apple has shied away from.

Today Microsoft released the Zune 2.5 software, which among other new features will offer downloads of TV shows from a variety of sources, including Comedy Central, NBC, Nickelodeon, Ultimate Fighting Championship and elsewhere. Overall, Microsoft will offer more than 800 TV episodes for download, priced at 160 Zune points (or about $1.99). Movies were not part of the announced offering.

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