Toshiba Shares Rise After Deal to Make Microsoft Zune

Aug. 28 (Bloomberg) -- Toshiba Corp. shares rose after Microsoft Corp. chose Japan's largest chipmaker to produce its Zune digital music player that will compete with Apple Computer Inc.'s iPod.

Shares of Toshiba gained 1 percent to 783 yen as of the 3 p.m. close on the Tokyo Stock Exchange.

Toshiba, which sells music and video players that use Microsoft's Windows software, filed with the U.S. Federal Communications Commission for approval of the device on Aug. 24. Microsoft confirmed the filing and Toshiba's role in the project.

Microsoft, the world's largest software maker, is working with Toshiba to get the device in stores for the holidays. The Redmond, Washington-based company plans to invest hundreds of millions of dollars over the next several years in a bid to dent Apple's 77 percent share of the $4 billion U.S. market for digital music players.

The FCC filing included a photo of the device, which is white with a black-trimmed screen and a black-trimmed, white wheel. Zune will have a 30-gigabyte hard drive, a three-inch screen, and an FM radio and be available in three colors, black, white and brown, according to the Toshiba filing.

Apple has sold more than 58.9 million players since Chief Executive Officer Steve Jobs introduced the gadget in October 2001, including 8.11 million units in the quarter ended July 1.