Microsoft is singing a new Zune tune. On Tuesday, the technology giant took the wraps off what it described as "the next generation" of its media player, software, and online store, for release in November. The open question is whether this next generation will be able to jumpstart the Zune line to compete more effectively with the current generation of Apple's iPods.

The new Zunes -- an 80-GB hard drive model, and 4-GB and 8-GB flash versions -- each have a touch-sensitive, navigational button called the Zune Pad, which allows users to thumb-navigate through songs, slide shows, or videos.

In addition, the Zune can wirelessly sync up with the owner's media collection on a PC and share music wirelessly with other Zunes. Any song that has been exchanged with another Zune can be played up to three times. The Zune can also automatically receive TV or other content that has been recorded on the owner's Windows Media Center PC.

A Zune Community

As one way to get momentum behind the Zune, Microsoft is hoping to foster a community identity for device owners and others through a new Zune Social online community. Now in beta, Zune Social gives "people a place to share their music tastes, knowledge, and experiences with others," according to the company.

Zune Social members can create a friends list, exchange song links and messages, post comments on others' profile pages, and visit recording artists' pages.

An online Zune Card automatically shows the user's favorite songs on their portable device or on their PC, and visitors can play samples of those favorites or buy them in the Zune Marketplace. Members will "eventually" be able to upload their Zune Card to popular social-networking sites.

When users do go to the Zune Marketplace, they will find that it has been updated, with a new design, thousands of music videos for sale, and over 1,000 audio and video podcasts available for free. More than one million DRM-free MP3 songs are on sale, and can be played on Zune or any other media player.

Microsoft Making 'Big Bets'

The consumer marketplace is now a major arena for Microsoft. In Tuesday's announcement, Chairman Bill Gates said that the company is making "big bets" on changing how people play and interact with entertainment experiences. In fact, he compared it to 20 years ago when Microsoft "bet the company" on an integrated productivity suite that was Microsoft Office.

Jupiter Research analyst Michael Gartenberg said that, while Microsoft is "certainly not betting the company" on Zune, consumer electronics "are as important -- if not more so -- to Microsoft" now as office applications were 20 years ago. But, he said, even though the new Zune lineup is a "good set of products and services," it doesn't change the game. "And the game," he noted, "is iPod."

Gartenberg added that the challenge for Microsoft in this arena is not so much the technology as the marketing and message. In particular, he said, why would someone want to choose Zune over the highly popular iPod?

He pointed out that there are some differentiators, such as being able to download what your Media Center PC has recorded, but that isn't presented strongly enough in a coordinated marketing message. Until that positioning takes place, he said, the Zune will have to be happy simply becoming No. 2.