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Microsoft CEO: Zune can beat iPod

Ballmer is confident that Microsoft's Zune player can dent the iPod's market share

As Microsoft's Zune media player hit the shelves , Steve Ballmer, Microsoft's CEO, says he expects it to break the dominance of the Apple iPod.

"We can beat them, but it's not going to be easy," Ballmer said. "The market will have two big players for a long time, us and Apple. Obviously we're the David in this one. Apple's the Goliath."

Zune is Microsoft 's first attempt to make a name for itself in the $4 billion US digital music device market, currently dominated by Apple's iPod .

The Microsoft Zune costs $249 (£132) in the US, the same price as an iPod with a comparable 30GB of storage space. Microsoft is trying to promote Zune as a social experience, adding an FM radio and the ability to beam songs from one player to another.

Analysts, however, predict that Microsoft will struggle to win sales over from Apple. "They're not going to take a lot of share [from Apple]," said Matt Rosoff, an analyst at Directions . "If they get double-digit market share overall in a year they'll be very pleased."

Fellow analyst Gene Muster of Piper Jaffray had a similar forecast, predicting Microsoft would take five to 10 per cent of the market in the first year. Meanwhile, UBS AG analyst Benjamin Reitzes expects Apple to sell 15.6 million iPods this quarter, topping the record 14 million sold in the 2005 holiday season.

Apple has sold some 67 million iPods since it was introduced in 2001, with just under 40 million players shipped in the past year alone.