Key difference: Zune and iPOD are both sleek, portable digital music players and devices. The main difference between the two players is based on their manufactures, company brand and their features.

The iPOD is a line of portable media players designed and marketed by Apple Inc. It was first released in the year 2001 and has been a fixture in the portable music scene for a decade now. Aside from the standard model, other devices in the line are the Video iPOD, the iPOD Nano, and the iPOD Touch, etc.  

The iPOD is popular because of its varying features such as:

• The controls of an iPOD are much simpler and easy to use; the user interface of the player is easy to learn and grasp, as a simple touch on the click-wheel allows fast searching of songs. Also, the touch screen is user compatible, quick and responsive.
• The software in the device allows for very easy music searches, which display the song lists and videos in a sleek and stylish fashion.
• It also connects seamlessly to other networks and offers good connectivity. It features camera and has a good storage capacity. Although, the screen is small, the device offers sharp images and high resolution, but it does not offer landscape support.
• The Apple’s itunes store is a big reason for iPOD popularity; it is easy to connect and quickly syncs up with the music files on the device. It provides the user with an easy and hassle free method of buying songs individually rather than whole albums. However, it doesn’t allow sharing of files with other devices.
• The design of an iPOD is considered iconic and is already similar to or with other music players. It is simple and very stylish with the availability of stereo headphones.

Zune was a brand of digital media products and services developed by Microsoft. It was launched in 2006, with Windows OS.

Some notable features of Zune are:

• The software in the device is an adapted version of Windows Mac and is actually considered quite well and compatible. The main problem lies with synchronization to PC; during the process, multiple problems like stalling and crashing occur.
• The device has an iPOD inspired circular d-pad. However, it is not so easy, quick and responsive as compared to other devices.  
• The device offers a large screen with landscape-oriented video support; it great for watching movies.
• There is also a seamless Wi-Fi feature for browsing and sharing of music. It also comes with a built in FM radio service. Although, it is Wi-Fi compatible, it lacks a browser, which makes it difficult to surf internet.

However, as of October 2012, all of 'Zune Marketplace' products and services have been replaced by Xbox Music, Xbox Music Pass, Xbox Video, and Windows Phone Store. But given the size and strength of Microsoft, the ‘Zune’ just might become a contender in the future.

Comparison between Zune and iPod:

Image Courtesy: amazon.com, techny.com