Microsoft says its new Zune music player will be sold at a price matching Apple Computer's market-leading iPod and, as a result, lose money this holiday season.

Microsoft's 30GB Zune will retail for $US249.99 - US99 cents more than the iPod with the same amount of storage - when it goes on sale in the US on November 14.

Songs available for download at the Zune Marketplace service will cost about US99 cents a song, on par with prices at Apple's iTunes, Microsoft said.

The world's largest software maker faces an uphill climb in trying to topple the market-dominating iPod after conceding a five-year head start to Apple's media player.

Microsoft said it needed to put a comparable price on Zune, even if it meant that the company will suffer a loss from the device's sales this holiday season.

"We had to look at what was in the market and offer a competitive price," said Scott Erickson, Microsoft's senior director of product marketing for Zune. "We're not going to be profitable this holiday but the Zune project is a multi-year strategy."