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Along with the other major record companies who have seen Zune prototypes, EMI is said to be impressed by the player's wireless capabilities and a feature that allows some sharing of music between users, features currently absent from the overwhelmingly market-leading iPods.

'Apple has been an important partner in building the digital music market but any well-funded serious entrant has got to be good news for the artists and industry,' Jeff Kempler, executive vice president of EMI unit Virgin Records America, told Reuters.

Microsoft, which has so far been vague on Zune's features, declined to comment.