Microsoft's upcoming Zune player was rumored to be priced at around $299. But earlier this month, Apple lowered the prices on its iPod models and began selling its 30 GB iPod with video playback for $249.

It's unclear whether the $299 price point was ever a reality for Microsoft, but the company clearly had to match or beat Apple if it was going to be successful on store shelves this holiday. The Zune has the same storage capacity as the $249 iPod.

Today, Microsoft said it would begin selling the Zune on Nov. 14 in the U.S. for $249.99. (That's technically 99 cents more than the iPod.) The Zune subscription service, which lets users listen to about 2 million songs, will cost $15 a month. You can't keep those songs, however; access is gone when the subscription ends.

Users can download songs to keep permanently at an extra price of 79 "points" per song. The points system is similar to what Microsoft uses in its Xbox Live Marketplace service. You can buy a block of points at a time with your credit card or by buying a pre-paid card in stores.