Fewer Reasons to Giggle at Zune

by Seth Jayson

In case you missed out on the media and fanboy rush to judgement, Microsoft (Nasdaq: MSFT) released details on it second-generation Zune lineup yesterday. The original brick-like hard-drive-based player gets an upgrade to 80 gigabytes, a much smaller form factor and weight, and a bigger screen. The single color choice mimics Spinal Tap's classic "none more black" album cover.

There's more variety in the flash-based lineup, but seriously, this thing is figgity huge. Yet despite its giant size, its screen is smaller than that on the diminutive, chubby new iPod nano. (Check out the big black border around the active screen area. Did Redmond plan for a bigger screen, then fail to deliver on the goods?) Either way, it looks to me like the flash player is destined to be a flop, which is too bad. The new controller looks promising, and there are more noteworthy changes afoot.

Baby steps
The press and other typical Redmond haters will likely gloss over some solid improvements in the software and OS, though these changes amount to some interesting differences from the Apple (Nasdaq: AAPL) lineup. The Zune's Wi-Fi chip will finally be put to some good use, with the ability to sync libraries across home wireless networks. (The ability to access a Zune store for direct off-the-Internet download would be better yet.)

New Zune software will finally support podcasts, and those who use Windows Vista's Media Center as a TV recorder will be able to synchronize their recorded TV right onto the device, a handy way to travel with any of your favorite shows (not just the suddenly diminished library at iTunes). Better yet, you won't have to shell out $2 an episode for something your cable company already delivers to your house.

Oddly enough, Mr. Softy is at least getting some props in the geek press and blogosphere for making these UI and software improvements available to owners of the old Zunes through a firmware update -- a policy that looks pretty generous, compared to recent shenanigans at Apple.

Sharing scheme still stunted
Least impressive is the change to the Zune-to-Zune song-sharing scheme. Gone is the "three-day" part of the previous "three-day, three-play" system. That's a help, but there are so few Zunes to share with that this feature remains still a joke. It will never be useful until there are a lot more Zunes in circulation, and maybe not even then. And the Zune sharing will remain an annoying headache until Microsoft alleviates the current, unpredictably spotty shareability of Zune downloads. Microsoft also needs to remedy the complete lack of logic for file-sharing between Zunes that both subscribe to Microsoft's all-you-can-eat music plan. (If you're sent a song available from Zune, and you're already on the Zune subscription, why should it have any limitations at all?)

Honestly, I think this is a lost cause. I don't think the file "squirting" scheme could ever be "fixed" to consumer satisfaction. When it comes to file-sharing, most people just want to pirate as much music as they want, sans consequence.

Foolish final thought
As far as investors are concerned, this matters very little. It would take an enormous success to make Zune a meaningful contributor to Mr. Softy's already-enormous bottom line. There's no way Zune will make much of a dent in Apple's market share, though it may erode sales for outfits like SanDisk (NYSE: SNDK) and Sony (NYSE: SNE). And maybe Zune will get a bit of help from Amazon.com 's (Nasdaq: AMZN) new, cheap, DRM-free music downloads.

As the owner of both a Zune and an Xbox 360, I can't for the life of me figure out why there isn't better integration between the portable and the promising Xbox Marketplace. If I shell out for a full-resolution episode of South Park on the Xbox, why can't you spot me a pint-sized version for the Zune? Why can't I use the Zune to haul around my Gamer profile, saved games and all?

Those kinds of possibilities could grow Microsoft's home-entertainment ecosystem into a real driver of revenue and profits. But before that can happen, Microsoft's got to keep the Zune from being the butt of every media-player joke.