Apple’s iTunes and iPod are to be challenged by Bill Gates with the announcment of a new digital media player announced by his Microsoft corporation.

Zune, as it is called, will be manufactured by Toshiba and is expected to be on sale by the end of this year, with an estimated price of $300.

It is expected it will have 30GB hard drives, a screen twice the size of the iPod’s and a selection of preloaded music.

The Zune will also have wireless streaming to allow users to share their content with each other, as well as an FM radio tuner.