The software maker also announced price cuts to existing models of the portable music player.
Microsoft plans to start selling a 64 GB version of the Zune HD portable media player this month and is cutting prices of the smaller models.
The company announced Wednesday that it will start taking orders for the 64 GB model April 12 through the online Zune Store. The media player will cost $350, which is nearly $50 less than the competing iPod Touch from Apple. The new Zune HD will be available in all the colors and custom etching available with the rest of the product line.
In addition, Microsoft said it would immediately cut the estimated retail price of the 16 GB and 32 GB Zune HD to $200 and $270, respectively. On Wednesday, Microsoft was offering to cut $20 more for a limited time.
Microsoft sells the Zune HD at less than the iPod Touch. The latter device comes in 8 GB, 16 GB and 64 GB versions at $199, $299 and $399, respectively. Nevertheless, Microsoft has failed to make a dent in Apple's commanding lead in the portable media market with the Zune HD, which was released in September 2009.
While the Zune HD has had many positive reviews, its biggest disadvantage when compared to the iPod Touch is the lack of an online application store where third-party developers can offer software to extend the usefulness of the device. Apple's App Store has been very successful in driving sales of the iPod Touch and iPhone.
The Zune HD features a touch-screen interface powered by organic, light-emitting diode (OLED) technology and Nvidia's Tegra HD graphics processor for fast action. It also includes a Quickplay menu that puts consumers a click away from favorite tracks, videos, and other content.
Microsoft plans to release soon a 4.5 firmware update for the Zune HD.
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