It's no secret that Microsoft seems determined to trade body-blows with Apple on a number of fronts: First came its "Laptop Hunter" ads, with "everyday" consumers rejecting Macs in favor of relatively inexpensive PCs; then came the near-gleeful announcement during the Worldwide Partner Conference that Microsoft would open its retail stores in close proximity to Apple storefronts.

Now Microsoft seems determined to ram head-on into the iPod Touch.

Rumored to launch sometime during the fall, Microsoft's Zune HD will feature a touch-screen, Wi-Fi and support for 720p video. It also has a couple of features missing from the iPod Touch, including HD Radio and (obviously) Zune on Xbox Live, which will port films and TV shows onto the device. Microsoft's hoping it will be able to eat into Apple's substantial media-device share with the pricing, which accidentally (or "accidentally," if you want to believe it was done to generate buzz) slipped out on Amazon.com earlier Aug. 11.

According to the Zune preorder screen, which subsequently seems to have been pulled, Microsoft had priced its 16GB player at $219.99 and its 32GB edition at $289.99. This undercuts both the 16GB and 32GB editions of the iPod Touch, which retail for $299 and $399 respectively.

Just like with Windows-equipped PCs, Microsoft is betting that consumers will gravitate toward the cheaper device, particularly during lean economic times. Its plans for the Zune HD, however, may possess the same Achilles' heel as Windows Mobile 6.5, its upcoming operating system for mobile devices: Neither has an ecosystem built around it that can rival Apple's App Store in terms of size and variety.

With Windows Mobile 6.5, Microsoft rushed to open its Windows Marketplace for Mobile to developers, months before the operating system's release in the fall. Microsoft is betting it can have around 600 applications available at the time of launch -- a drop in the proverbial bucket compared with the App Store's 65,000 applications, but more than enough to beat the Palm Pre's App Catalog.

The Zune Marketplace may be able to compete with Apple in the music and video arena (although the fact that it's missing "Lost" is a point against it in my book), but the lack of applications aside from a handful of free games means the Zune is fighting for market share with one hand tied behind its back.

Microsoft has publicly trumpeted that low PC prices -- and the ad campaign highlighting them -- ensured the solidification of its market share against Apple. It's evidently hoping that lighting will strike twice with a cheaper touch-screen media player.