Microsoft’s Zune is evolving, the company said Tuesday. One branch of that evolution is a new generation of the portable media player, Zune HD, which will incorporate a built-in HD radio receiver, high-definition video output, an organic light-emitting (OLED) touchscreen, Wi-Fi and a Web browser. The new model will be available in the fall.

The other evolutionary branch is that Zune will become a “a premium partner” in the Xbox LIVE Video Marketplace. Microsoft said the first slot in the user interface of the marketplace will be Zune’s, with a catalog of TV shows and films.

‘Smart Move’

Zune HD offers higher-quality sound than regular radio and, in some HD broadcasts, additional channels and metadata about songs and artists. The OLED touchscreen features a 16×9 widescreen format in 480×272 resolution, and a user can also watch HD video files on a 720p TV through an HDMI connection.

James McQuivey, an analyst with industry research firm Forrester, called Microsoft’s integration with Xbox Live “a smart move.” Instead of trying “to build a new Zune music following,” he said, the company is “opting to simply build on the millions of Xbox 360 Live users.”

McQuivey noted that this effort might not “rescue the fortunes of the device itself, but it could if they can create a seamless media experience between the Xbox and the Zune media player.”

The bottom line, he added, is that this move gives Zune “a solid footing from which to climb higher, but whether the device comes along for the ride or not depends on how well it can complement the Xbox experience.”

‘Re-Branding’ and Platform

Ross Rubin, director of industry analysis for consumer technology at the NPD Group, said in the short term Zune becoming part of Xbox Live is “going to be a re-branding,” and at the moment it is a separate initiative from the player itself. At some point, he agreed, it “could open the door for a more direct exchange” between the online brand and the player.

Rubin also said that, with the high definition and other improvements on the player, Microsoft is “fielding a product that could more directly compete with Apple’s iPod touch,” although he pointed out that the HD radio technology “has had a difficult time” catching hold.

He also noted that Apple has leveraged many of its own and third-party iPhone applications for the touch, which has helped to turn the Apple media player into a portable platform as well as a media player.

Microsoft has also used the term “platform” to describe Zune, encompassing the portable digital media player, software, the Zune Marketplace online store, the Zune Pass music subscription service, the Zune Social online music community, and now the Zune part of Xbox Live Video Marketplace.

Via Yahoo