Microsoft's New Zune: Is the Second Generation Media Player Finally Challening Apple's iPod?

The news today that the new Zune's from Microsoft were outselling Apple's own enigmatic iPod on Amazon.com got me wondering if this was some sort of trick by Microsoft to create artificial scarcity and repeat their smash of the Xbox 360 or if the player had finally caught on with consumers.

Introduced only a week ago, by this morning Microsoft 's heavily discounted, 30-gigabyte, $134 Zune digital media player was ranked the No. 1 bestseller in the Seattle online retailer's list of top-selling MP3 players in the "Electronics" category. Apple's four-gigabyte iPod nano was No. 2, followed by Apple's 80-gigabyte iPod "classic" at No. 3.

Last week, the Redmond computer giant introduced a new 80-gigabyte Zune player, but they're hard to find. Amazon's site on Monday said they're "temporarily out of stock" and no future shipping date was listed. Microsoft's own Zune site said the 80-gigabyte player can't be ordered until "early December."

In more ways than one, the new Zune's take a strong set of differentia from the first generation and execute more effectively while adding features that truly make it a hipper product. USAToday had a review recently:

A year after the first Zune media player arrived to so-so reviews, Microsoft is back for the sequel. Three new Zunes have been added to the lineup, along with revamped software and a new Zune Social online community that lets folks share listening habits.

Zune, of course, is Microsoft's so-far failed attempt to knock Apple off its digital media pedestal. With Zune players and online Zune Marketplace store, Microsoft adopted the kind of closed end-to-end system made famous by the iPod and iTunes. Zunes don't work with Napster, Rhapsody or other services.

Microsoft has addressed some criticisms associated with the original Zune while ignoring others. It has slightly loosened restrictions when you swap music wirelessly with another Zune owner. Podcasts and music videos are now available in the Marketplace. But you still must buy stuff there using the silly Microsoft Points currency — 79 Points for a typical track adds up to the same 99 cents you pay elsewhere.

Worse, I encountered at least one maddening snag trying to get an otherwise welcome new wireless syncing feature to work with my Internet router.

On balance, Zune deserves a far better reception this go-round. While I'm not retiring my iPod, the new Zunes are creditable competitors. They're good looking.

They boast features I've long wanted in an iPod, notably an integrated FM radio and monthly subscription plan that lets you listen to downloaded tracks as often as you please, provided you keep your account current. Then again, the iPod Touch and iPhone one-up Zune in the ability to wirelessly sample and buy music through Wi-Fi.

Let's zoom in on Zune:

•Meet the Zunes. The new lineup starts with 4-gigabyte and 8-GB flash-memory models, priced at $150 and $200, or what same-capacity iPod Nanos cost. The 1.7-ounce devices come in black, pink, green and red, and have a rectangular shape that is closer to previous-generation Nanos than current models.

The larger 4.5-ounce $250 top-of-the-line Zune is in black only. It comes with an 80-GB hard drive, and slightly better ear buds than its less-expensive cousins. It has a large, 3.2-inch screen that's bigger than the displays on the iPod Classic series that is its most natural competitor.

Free, for now: the ability to laser engrave artwork onto the devices.

After a brief learning curve, I generally found it easy to navigate and rapidly scroll through Zune's menus using a new touch-sensitive Zune Pad controller. You slide your finger up and down or right and left on the Pad or press its center or edges to make things happen. Play/pause and back are the only other controls.

Meanwhile, the chubby original 5.6-ounce, 30-GB Zune is still around, in black, white, brown, pink and red. It's at $200, or $50 below where it started. Through free software upgrades, it can take advantage of most new Zune features.

•Wireless sync. One of the new features is the ability to wirelessly synchronize music, pictures and other content with a PC through your home network. After the initial set-up in which you connect Zune to a computer through USB — that's the conventional way to sync — you can proceed without the cord, in one of two ways. You can set it up so the device automatically syncs whenever it is plugged into power, through an optional dock or AC adapter. When unplugged from power, you must manually initiate a wireless sync.

Only it didn't work out for me until I replaced my nearly 3-year-old Linksys router with a new model.

•Share a tune. One wireless feature that did work right away, within limits, is sending a song to another Zune owner, provided their Zune device is within about 30 feet of yours. You don't have to be near a Wi-Fi hot spot, but the person you are sending the song to has to click to accept it. Alas, they don't know the name of the incoming track ahead of time. The original Zune was capable of this stunt, but Microsoft has loosened the noose. Previously the person you were sending a song to could listen to the track just three times or over a three-day period, whichever came first. Now, they can play the song three times over an indefinite period. (It's considered a "play" after a person has listened for one minute or half the length of the track.)

The three-and-out restrictions apply even if you want to share music you've composed yourself. Moreover, rights restrictions imposed by the labels prevented me from sending Frank Sinatra tunes from one test device to another.

Likely challenge: finding another Zune owner with whom to share tunes in the first place.

I wish you could preview and purchase songs wirelessly from the Marketplace, as is possible with the iPod Touch and iPhone via the iTunes Wi-Fi store.

•Slicker software. The revamped Zune online interface is classy looking and pretty easy to get around, with four main menu headings at the top of the screen (Collection, Device, Marketplace and Social). It makes good use of album cover art, though there's nothing quite as visually arresting as the Cover Flow view in iTunes.

Through a $15 monthly Zune Pass subscription, you can download unlimited tracks to three PCs or up to three Zunes. But the Marketplace has around 3 million tracks, only about half what iTunes offers. More than a million are MP3s, not saddled, Microsoft says, with digital rights restrictions. There's a skimpier selection of podcasts and music videos than Apple has. The Marketplace doesn't sell TV shows, movies or audio books, though you can watch shows synced from a Media Center PC.

Microsoft has a long history of going through two or three versions before its products measure up. So Zune is better and can get better still.

But Matt Rostoff on CNET's Digital Noise said there was still a bit left to do - in particular with the software:

It's surprising to me given Microsoft's long history as a desktop applications company, but once again, the weakest link in the Zune lineup is the PC software.

Every Sunday during NFL football season, I watch the Seahawks (often an exercise in frustration) and record LPs to WMA files using Microsoft's Digital Media Plus Pack for Windows XP (sadly, it's been discontinued, and so far there's no Vista equivalent). The Zune software automatically imports any file that's added to Windows' My Music folder, which is the default location for files ripped with the Plus Pack. That's nice--my LPs go straight into Zune once I rip them. But the first generation of the software often butchered the metadata (data about songs) I'd entered--for example, it couldn't recognize song order, and instead ordered them alphabetically. So I'd have to go in and edit it manually. An annoying process, and one I hoped they would fix.

The Zune 2.1 software does a slightly better job of importing metadata. Unfortunately, if you do have to make some edits, the Zune software makes it much harder do so. For example:

Album art. When you rip an LP (or take audio from another source--such as a bootlegged MP3 file), it doesn't come with album art. With the old Zune software, you could tell it to update the album information, and if it recognized enough information--such as album title, artist name, and song order--it usually got the album art right. (Although sometimes I had to re-edit the genres because it overwrote them as well.) If that didn't work, you could copy a .jpg file into your Web browser, then paste it immediately into the blank space in the Zune software. Not anymore--I have the Zune software set to automatically update album information, but so far it isn't working. And to paste art manually, you have to copy, save to your hard drive, then look up the location in the Zune software to paste it. It's an annoying and completely unnecessary extra step.

Editing song data. I've gone back and forth on this one--at first, I thought it was impossible to edit any song data, then I discovered how to edit data such as genre. But it only works for some data! For example, although it (somehow) keeps order consistent with the way I recorded it, the "song order" column still shows "0" for every song. This means if I wanted to use another program to play these files, it wouldn't know what order to list them in. And you can't add the right song order in the Zune software. Moreover, there's no batch editing--if you select more than one song and right click, the "edit" option doesn't appear. Crazy.

List view won't display your selection. As I mentioned in my last Zune post, the only way to edit the limited metadata that Microsoft will let you edit is through the list (not browse) view. But here's a strange design choice: if you select a song or album, then click "list," it won't show that song or album. Instead, it lists them in alphabetical order, forcing you to scroll until you find the song or album whose data you want to edit. Insane.

There are enough nice things about the new Zunes--wireless sync in particular, as it works flawlessly and provides a real benefit for me--that I can't dismiss them out of hand. But I don't understand why the team in charge of the Zune PC software made these changes. Are they targeting digital music newbies who won't notice the missing features? Did they run out of time? Was their testing insufficient? Whatever the reason, working with imported song data in Zune is such a hassle that I'll have to find another program to rip my LPs directly into iTunes, which makes it super-easy to edit metadata. The Zune software can just draw those AAC files from my iTunes folder, which lets me bypass it for all but the syncing process.

Unless they fix these issues in a software update. Please?

So, is this artificial scarcity or legitimately underestimating the market demand? Joe Wilcox from Microsoft Watch speculates during his search for an 80 GB model of his own:

Microsoft must have shipped heavy on the 4GB and 8GB Zunes for a reason. My two guesses: appeal of smaller devices and to fill the sales vacuum left by the iPod nano.

The latter guess isn't insignificant, if right. Apple's move to the squat (what I call "the chub") nano left a void where the gum-stick-shaped iPod filled. Apple may have moved on, but there is probably a good market for the gum-stick-shaped form factor. I certainly wouldn't buy a chub nano.

The real quandary now for Zune is Black Friday. Will Microsoft get the Zune 80 on store shelves, in large enough quantities? Microsoft might as well have done a Windows Vista and launched Zune in January, if the 30GB and, particularly, 80GB models miss the start of the Christmas buying season. Zune isn't Xbox 360. Shortages will mean lost sales, not pent-up demand fulfilled later on.

The bigger question: What deals will retailers offer to sell Zune? If Target is giving away a $25 gift card before Black Friday, what better sales incentives will come later?