The Zune HD utilized the Nvidia Tegra APX 2600 chip, allowing it to play 720p video through the optional HDMI Zune dock on a high-definition television. Otherwise, content would be scaled down to 480×272 pixels on the player's OLEDtouchscreen.
Soon after Apple released the iPod Touch, Microsoft R&D department head, Robbie Bach began work on a touch-screen Zune player to combat it. The department started immediately on reworking the Windows CE-based OS of the older Zune to suit the new multitouch PMP. Astro Studios was contracted to design the Zune HD's aluminum casing. On June 19, 2009, Zune Insider host Matt Akers confirmed that the Zune HD would have an NvidiaTegra APX 2600 chip and OLED touchscreen.
The Zune HD was released on September 15, 2009 to retail markets in black and platinum colors and 16 or 32GB capacities; additionally, red, green, and blue-colored models were available through the online Zune Originals store.
Two months later, on November 6, 2009, firmware update 4.3 was released. The new firmware version improved the performance of the web browser, added support for the apps that were to be released in the days that followed, and fixed several notable bugs. On November 11, 2009, several new apps appeared on the Zune Marketplace. The apps included Project Gotham Racing: Ferrari Edition, Audiosurf: Tilt, Lucky Lanes Bowling, Vans Sk8: Pool Service, Checkers, and Piano.
The Zune HD's Twitter app was released on December 16, 2009 to the Zune Marketplace; however, it was soon noticed that the app was censoring tweets. Microsoft promptly fixed this following an outcry among Zune HD owners in version 1.1 of the app.
After previously being promised before the end of 2009, the Facebook app was made available on the Zune Marketplace on March 1, 2010. Initially, the app had some API issues in which it could not download most information from Facebook, but these issues were corrected 2 days later without a software update.
On April 5, 2010, after being announced at CES 2010, firmware version 4.5 was released, bringing with it several new features, such as on-device Smart DJ (a feature that had been present in the PC software for some time), Xvid codec support, and Marketplace support through the optional dock.
Less than one week later, on the 9th of April, a 64GB capacity Zune HD went on sale; in addition, the 16GB and 32GB models released in September 2009 both had a price drop of US$20 on their MSRPs.
On October 3, 2011, Microsoft announced that it has discontinued all Zune hardware, encouraging users to transition to Windows Phone. While that announcement was initially removed as potentially erroneous, it was reposted permanently and confirmed by Microsoft soon thereafter.
In 2012, Microsoft launched Xbox Music, a successor to the Zune Marketplace. Leading up to the launch of that service, a number features of Zune and the Zune Marketplace were discontinued. Zune HD apps were longer available though the Zune Software, social components of Zune were deactivated, and limitations were placed on music video purchasing and viewing.
As of late 2012, the ability to download songs directly to the Zune HD has been broken. According to the Zune Support Twitter feed, Microsoft will not be fixing it, instead announcing that it is part of the transition from Zune Music to Xbox Music.
As of August 2011, the Zune Marketplace has 62 apps for Zune HD, of which 42 are games. All of the apps and games are free. Apps available excluding games are Calendar, Fingerpaint, Stopwatch, Alarm Clock, Chord Finder, Facebook, Twitter, MSN Money, MSN Weather, Calculator, Piano, Metronome, Level, Drum Machine, Fan Prediction, Shuffle by Album, Windows Live Messenger, Notes, Email and Zune Reader. An extension to the Microsoft XNA framework providing development support for the Zune HD was released on September 16, 2009. The Zune PC Software can be used for adding apps to the Zune HD. The Windows Live Messenger app for the Zune HD was released on October 1, 2010, making Messenger available for all major mobile platforms. The email app was released for the Zune HD in April 2011 allowing users to sync with their email accounts and download folders and emails. The app is similar to the email interface on the Windows Phone.
No new apps have been released for Zune HD after August 2011.
Several games have been released for the Zune HD, including portable versions of Audiosurf, Hexic, and Project Gotham Racing. Independent titles written with XNA are also available from multiple sources.
On April 20, 2010, an independent app developer released a port of Doom, one of the first independent 3D games to be developed for the Zune HD, using OpenZDK.
The browser features favorites and Bing search. The keyboard can be accessed by touching a text box, swiping up from the bottom bar of the browser and touching the address bar, or touching the magnifying glass (search) icon on the bottom bar of the browser. The keyboard has portrait orientation, with the keys bulging around the user's finger when touched. The web browser has pinch and stretch for zooming and page reorientation due to the built in accelerometer. The Zune HD web browser scores 5/100 in the Acid3 test. As of the launch, the Zune HD's web browser does not support Adobe Flash applications, such as video playback on YouTube, and no plans have been made to bring Flash support to the device.
With the 4.3 firmware update, browsing performance was improved, and users can change the Internet settings to display the browser optimized for a Mobile device or for a PC experience. In addition, users can now enable "auto correct" and "auto capitalize" when using the keyboard to enter information, making it easier to type content into the browser.
With the 4.5 firmware update, browsing performance was further improved. In addition, Smart DJ playlists, Picks, expanded video codec support, and the ability to download photos and sort favorites by name and date were included in the update.
The Zune HD was the forebearer of Microsoft's typography-based design language, Metro which ultimately came to fruition with Windows Phone. The short-lived Kin phones also share a similar typography focused design. It uses a font family called "Zegoe", which is a modified version of Microsoft's font family, Segoe.
Technology news website Gizmodo labeled the Zune HD's UI as "an evolution of the PMP—not a devolution of some smartphone model. Every new feature it has is used to expand the way you absorb media, from the HD video output to the HD radio to the redesigned UI."
Prior to the release of the OpenZDK development kit, writing applications for the Zune required the use of Microsoft's XNA development environment. Instead of using XNA, developers can now write apps in C++ that run natively on the Zune, without the overhead of the XNA library. Developers can also access APIs previously used only by Microsoft, such as the 3D graphics and Internet APIs.