Zune HD Price Drop: Too Little Too Late?

Microsoft this week dropped the price of its Zune HD personal media player, improving the device's pricing edge over the Apple iPod touch. The 16GB version of the Zune HD, which previously retailed for $229, now costs $199. And the 32GB version dropped from $299 to $269.

By comparison, Apple sells an 8GB version of the iPod touch, using dated technology, for $199. A 32GB version that features modern underpinnings costs $299, or $30 more than the comparable Zune HD.

Granted, Apple's products have some built-in advantages, not the least of which is compatibility with the applications available from the voluminous iTunes App Store. Zune HD, by comparison, only offers a small handful of free apps.

But the Zune HD is a better music player than the iPod, and offers a superior OLED screen, as well as other unique features, including HD Radio and HD video-out. So far, it hasn't made a dent in the market. While the iPod touch continues to be the best-selling MP3 player, the Zune HD is an also-ran.

Contributing to this issue is the fact that the Zune HD is currently only available in the United States. And while a recent Zune PC software update revealed new support for Italy and Germany, that refers only to the PC software and doesn't suggest that Microsoft will soon sell its Zune HD devices internationally. The company has refused to discuss non-US access to the Zune HD