The Apple iPod could be facing new competition as Microsoft launches three new models of its Zune digital media player.

The gadgets come as 4GB, 8GB and 80GB models, boast wi-fi and have a similar touch sensitive navigation tool to the iPod.

A new networking site called Zune Social is also due to be launched, which will allow users to share music.

However Microsoft only shifted 1.2 million Zunes last year, while 100 million iPods flew out of US shop doors.

At the launch Microsoft boss Bill Gates voiced confidence that the digital music player will catch on, pointing out that his company took risks 20 years ago and subsequently changed the way people work forever.

“Today we’re making big bets on games, music, video and connecting these entertainment experiences to help change the way people play,” he said.

Microsoft expects the gadgets to take three to four years to become a real rival to Apple.

The new Zunes will be available stateside from mid-November, with no date confirmed for its European launch.

The gadgets are priced at £73 for the 4GB player, £97 for 8GB and £122 for 80GB.