The new Zunes have a familiar design

The players - which come in 4GB, 8GB and 80GB models - have wi-fi so users can automatically download music, photos, and video from their computer.

Microsoft is also launching a social networking site dubbed Zune Social to allow users to display and share music.

Last year Microsoft sold 1.2 million Zunes compared to 100 million iPods shifted since its launch in 2001.

The new players go on sale in the US in mid-November. There are no details yet as to when they will be released in Europe.

They will be priced at $149 (£73), for the 4GB player, $199 (£97) for the 8GB player and $249 (£122) for the 80GB player.

It comes with a familiar circular touch-sensitive navigation button.

New songs

Bill Gates said the new players will take some years to bed in

Analysts are not convinced that the new-look Zunes will allow Microsoft to close the gap on Apple any time soon.

"This device with the all-too-familiar dial wheel compares reasonably favourably with last generation iPod players," said Mark Mulligan, analyst with Jupiter Research.

"Microsoft needs to come at Apple from an unexpected angle but at the moment it is Apple with its new iPod touch and nanos that is shaking up the market," he said.

According to data from the NPD Group, Apple controls over 80% of the digital media player market with SanDisk in second place with 5.8% and Microsoft in third, with 4.4%.

Microsoft said at the launch of the new Zunes that it expected the devices to take three to four years to bed in and become a legitimate rival to Apple.

"Twenty years ago we bet the company on an integrated productivity suite of word processing, spreadsheets and presentations, and we changed the way people work," Bill Gates said at the launch.

"Today we're making big bets on games, music, video and connecting these entertainment experiences to help change the way people play," he added.

The company also said that it would add more than one million MP3 songs free of digital rights management onto Marketplace, its digital music store which currently sells music videos and offers video podcasts free.

There were no more details about what music would be available.