Shawny Chen, a digital audio analyst for Current Analysis thinks Zune will be a failure this holiday season. “I don’t think it’s going to be, a popular Chrismat item” she said “The large screen is nice to have, but the look is not as sleek as what Apple has on the market.” Chen also said that she didn’t think users older than college-age students would end up sharing their music using the Zune Wi-Fi “beaming” technology. Furthermore, she said that Microsoft’s apparent decision to forego its “PlaysForSure” rights-management technology — used by MTV’s Urge, MusicMatch, Napster, and others — in favor of direct ties to its own music store would end up hurting it.

“I think it is going against the first initiative, which was to create this PlaysForSure network, and now they’re kind of turning their back on it,” Chen said. “The only way to compete is to offer better service, and from what I’ve seen so far it doesn’t offer that much.”

The Zune was originally priced about $299, Chen said, although she said that reports that the Zune’s price had been cut to $229 may be true, given that Apple has reduced the price of its own players.

Goldenberg said that Christmas demand every year is based on the latest and greatest technology.

“Whether it’s MP3 or iPods, we’ll continue to see the new technologies embraced,” he said. “The video iPod will be strong, but the other thing that we’re seeing is that we’ve passed the early adoption period where the new users grasp on to iPods quickly. We’re seeing people move on to the new generation, the larger storage size, and things like that.”