Microsoft Corp. (MSFT) Thursday made available a high-definition version of its Zune digital music player, the company's latest attempt to claw market share away from dominant Apple Inc.'s (AAPL) iPod, in the music device market.

Zune HD, which customers can pre-order Thursday, goes on sale at a significantly lower price than Apple's iPod Touch, an equivalent product, and with attractive new features like high-definition radio and a touch-screen interface.

But the latest Zune likely faces a continued struggle against Apple, and the improved functionality may be too little too late, analysts say. According to figures from market research firm NPD Group, Apple had 73% of the market in June 2009, while Microsoft had just 2%.

"This is a good product," said Matt Rosoff, an analyst with Directions on Microsoft, which tracks the Redmond, Wash.-based software giant. "But if Microsoft really wanted to play in the (music device) market, it should have made it earlier."

Apple is also expected to announce some upgrades to its iPod Touch in the fall. Analysts believe it could also lower prices on its own products in response. Apple didn't immediately respond to a request for comment.

The Zune HD represents a significant break with the past for Microsoft. While Apple has morphed its iPod, which it launched in 2001, into a range of models including the Internet-enabled iPod Touch, and more recently into the iPhone, Microsoft has so far limited the Zune to a few devices, differentiated only by size and storage capacity.

Expected to hit stores Sept. 15, the new model will change that, with an iPhone-like touch screen, Internet browser and high-definition video output capability. The device also offers HD radio, which is not available on the iPod touch.

The 16-gigabyte model is making its debut at $219.99, compared with $299 for the 16-gigabyte iPod touch. The Zune's 32-gigabyte model is set at $289.99, while the comparable iPod touch is priced at $399.

Analysts say although the music player market is maturing, Microsoft may have an opportunity, with the Zune HD, to target a niche market of consumers who don't want to listen to music through their phones, preferring a dedicated listening device.

Zune HD is one of a range of fronts through which Microsoft is trying to burnish its image with consumers, including retail stores, due to open in the fall.

The company will be hoping to jump-start lackluster entertainment sales through Zune HD, among other things. Revenue from the company's entertainment and devices unit, which makes Zune and Xbox, fell by 25% in the company's fiscal fourth quarter, ending June 30.

Microsoft shares closed up 0.4% Thursday at $23.62.

-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455; jessica.hodgson@dowjones.com

(Tess Stynes contributed to this report.)