Microsoft's upcoming Zune portable media player was a recurring subject of questions for Bryan Lee, corporate vice president in the company's Entertainment and Devices Division, during Citigroup's Global Technology Conference in New York today. Among other things, Lee described the monumental challenge Microsoft faces in trying to take on Apple's iPod. He also sought to debunk the notion that Zune will just be a repackaged Toshiba Gigabeat.

Excerpts, gleaned from the webcast:

On the potential market: "We see this space as having the potential scale not of today's market, which sells 30, 40 million devices, but of something closer to the cell phone market, where you sell hundreds of millions of devices."

On the challenge of taking on the iPod: "As we've gone out and talked to consumers about Zune, we've asked them, 'Do you feel you have choice in the space?' and we get a resounding, 'Yes, we have a lot of choice -- you can get a Shuffle, a Nano, a video iPod.' ... Which just amplifies the challenge that we face."

On what Microsoft thinks it can bring to the table: "[F]or us, it's very much about taking the world we see today, adding a software layer, creating an environment of connection, and creating a layer of intelligence that allows for much richer consumer experiences. So Zune is just another example of that."

On the Zune's community elements: "[M]y experience gets better because I have one, because you have one, because Joe has one. We can learn from each other. The device can learn from me, and it can learn from each of us. When we get specific on features and things that we're doing, you'll see a lot of emphasis on community, on a shared type of experience."

On the choice of Toshiba as manufacturer: "We knew that we needed some contract manufacturing, someone to help us. Much like with the Xbox business, we don't literally run the factories. ... We do a lot of the design. So we picked Toshiba. They brought experience in the space that we didn't have. They brought some of the foundational technology, but the device that you see will not look or feel or smell very much like the product that they've taken to market thus far."