New Zune feature: Download songs you hear on FM radio

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One thing about the folks at Microsoft: They don’t give up. And that has been true for the Zune, its digital music player, which the company keeps upgrading even with Apple dominating the market.

Today, in advance of an Apple event Tuesday, Microsoft released a host of new features for the Zune, which has about 4% of the market, compared with 71% for Apple’s iPod, according to NPD Group.

Among the new features, Zune will enable its users to download music wirelessly and to buy songs they hear on the built-in FM radio. A new crop of Zunes will come in 16 gigabytes and 120 gigabytes and in new colors -- blue on silver and all black. And Zune will start offering recommendations based on the music users listen to.

I’m meeting with the Zune folks this afternoon, so I’ll update soon with more information.

But the timing of the Zune news, which was leaked one day early by a retailer, comes as Apple is expected to refresh its iPod line as well as possibly make changes to the iTunes online store. Whatever the news, excitement is waning. In the last five 5 days, Apple shares have fallen more than 8% as analysts have lowered expectations for the event.

Expect a revamped iPod Nano and maybe a slimmer, cheaper iPod Touch, Shaw Wu of American Technology Research said in a note this morning. ‘While there is always room for surprise, it seems this event may be somewhat underwhelming vs. previous expectations and events,’ he said.

-- Michelle Quinn