Zune's Tired Tune

There's nothing like an ill-timed piece of spam to shed some light on the cavalcade of failure that is Microsoft's (Nasdaq: MSFT) Zune.

On the heels of Apple's (Nasdaq: AAPL) big iPod announcements yesterday (chubby little video nanos and an iPod touch -- an iPhone without the phone guts, pretty much exactly as I predicted), the news from Zune, straight to my inbox, is this:

• Halo 3 Zune, featuring laughable geek graphics and preloaded advertisements for the upcoming Xbox 360 hit.
• "The AICP honors Zune Arts 'Monster' video."
• Zune Ignition Artist: Talib Kweli.

Believe me. I'm as excited as you are, which is to say, not at all.

Not that the Zune PR team has much to work with. The only real news (missing, for some reason, from this bit of spam) is that Microsoft is cutting prices on the 10-month-old player to $200 a pop.

Obviously, Microsoft's Zune Czar, J Allard, is presiding over a miserable failure of a device. (I say that as the resident of a two-Zune household.) Not only is the Zune hardware completely outclassed by the new generation of iPods, but Apple has also leapfrogged Microsoft by including a Wi-Fi chip in the iPod touch, and -- get this -- actually making it useful.

Taking a page from SanDisk (Nasdaq: SNDK), Apple is making downloads available directly to the device, via a Wi-Fi connection to a mobile version of the iTunes Store. Apple has also linked up with Starbucks (Nasdaq: SBUX) to work on some social song-sharing projects -- you know, the kind of hotspot-based downloading stuff the Zune team mumbled about but never got done.

While Apple has taken a better machine with a snazzier UI up another level (and dropped in a Web browser, to boot), the Zune's much-ballyhooed Wi-Fi chip remains completely worthless.

As I've noted before, Zune-to-Zune sharing never had a chance of working. First, there weren't enough Zunes in circulation. Next, Microsoft's cumbersome and idiotic DRM scheme restricted a large (but unspecified) number of Zune store songs from being shared at all. (I had a 30%-50% failure rate early on, shut off the Wi-Fi, and have never turned it back on.)

And of course, even when songs could be shared, they came with that ridiculous three-day, three-play restriction, even when shared between Zunes that were hooked onto Microsoft's all-you-can-eat monthly subscription plan.

Couple this with the billion bucks worth of warranteed hardware failures generated by bad engineering in the Xbox 360, and this shareholder is starting to think that Microsoft wunderkind Jay Allard should be shown the door -- or at least another door in Redmond. Microsoft should shutter the entire Zune fiasco now, fire all the staff dedicated to creating last year's media player of tomorrow, and spin off Xbox as a new company, freeing it from Microsoft's slow-yet-somehow-incompetent-too R&D environment.

There's no room for nimble and clever in the belly of the bloated Redmond beast. The past two days have proved that yet again.

Stick this in your playlist:

• Mr. Softy's Extended Embarrassment
• Microsoft's New Paperweight
• Microsoft's X-Botch
• Zune: The Good, the Bad, and the Ugly

Philip Durell probably has a different opinion on Microsoft, since he recommended it for Motley Fool Inside Value subscribers. To see his perspective on the company, take a free trial today. Starbucks is a Stock Advisor pick.

At the time of publication, Seth Jayson, a top-10 Motley Fool CAPS player, had shares of Microsoft, but not for long. He woulda signed up for an iPod touch, if only Stevie had put a decent hard drive in it. He had no positions in any other company mentioned here. See his latest CAPS blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.