120 GB Zunes begin to appear in stores

Microsoft has confirmed that it has begun to ship the newer high-capacity Zunes at a price that makes it quite competitive against the market-leading iPod.

The 120 GB Zune will sell for $249, the same price as the 80 GB Apple iPod. Internet reports say the devices began shipping to retailers this week, and Microsoft says the rollout will continue to additional retailers over the next several weeks.

Rumors that the higher-capacity device was coming was first posted by Zune enthusiast site Zunerama last weekend. From there, the story took flight and reports seemed to indicate the 80 GB model was being phased out.

Zune team member Cesar Menendez later confirmed to Zunerama that the device was indeed on its way.

Microsoft has not been able to gain much traction at all, with its market share still remaining in the single digits. While the introduction of flash-based players helped -- which are much more popular with consumers -- the device still is outsold by a factor of many times over versus the iPod.

While the 80 GB version included a pair of premium headphones, it appears from the unboxing reports done by various blogs that Microsoft has only included a pair of standard headphones with this model.

It's likely that in order to put the price at a level that would put it in direct competition with the entry level iPod classic, some concessions had to be made. Otherwise, all other accessories included appear to be the same as previous models.