By Richard Menta 9/9/08

Even though Microsoft's Zune only has only managed a sliver of the MP3 player market share thanks to Apple and its venerable iPod it keeps pumping away with improved portables. The company has released details of its third generation player with several new features it hopes will at least allow the Zune brand to gain ground on number two maker SanDisk. Since Microsoft introduced Zune in 2006 it has sold 2.5 million players, which is quite modest when compared with the 18+ million iPods Apple moves in a single quarter.

The flash-based Zune gen-three offers 4GB ($129), 8GB ($149), and 16GB ($199) capacities, while the brand's hard-drive units will get 80GB and 120GB ($249) of storage space. Like the iPod touch, the new Zunes will be able to download song files through its Wi-Fi connection. Zune 3 has also added RDS (Radio Data System) and RTplus (radiotext) technologies for its "Buy from FM" feature that allows users to tag songs heard on the radio for later purchase. A new proprietary music discovery algorithm allows the Zune to make song suggestions ala Last.FM and Pandora. These features are backward compatible, meaning owners of older first and second Zune units can upgrade their portables.