Microsoft Corp. (MSFT) said on Thursday it will launch a 30-gigabyte Zune portable media player, the software maker's answer to Apple Computer Inc.'s (AAPL) market-leading iPod, in the United States this holiday shopping season.

Microsoft also announced it will introduce an iTunes competitor called the Zune Marketplace, where users can choose to buy songs individually, or purchase a Zune Pass subscription to download an unlimited number of songs for a flat fee.

The Zune, manufactured by Japanese electronics maker Toshiba Corp., will come with a 3-inch (7.6 centimeter) liquid crystal display screen and wireless connectivity that allows users to send, receive photos, songs and albums with nearby players, Microsoft said.

[Zune users who receive songs can listen to each one three times over three days before having to purchase it themselves, The Associated Press reported.]

The company said it was not ready to provide any exact timing or price for the product's release. But a Microsoft spokeswoman questioned the accuracy of media reports saying the Zune will sell for $300, because it will be priced "competitively" with rivals.

Apple earlier this week launched a 30-gigabyte video iPod with a 2.5 inch screen for $249.

"The digital music entertainment revolution is just beginning," said J. Allard, a Microsoft vice president of design and development, who is in charge of the Zune line of products.

The world's largest software maker faces an uphill climb in closing the gap with Apple's iPod media player and iTunes Music Store, the runaway leaders in their respective areas.

The iPod holds more than half of the global digital media player market, according to research company NPD, while iTunes accounts for over 70 percent of U.S. digital music sales.

In the United States, the iPod has more than 75 percent of the digital music player market, according to NPD.

Microsoft shares were up 36 cents at $26.34 around midday on the Nasdaq.