The Zune is dead, long live the Zune HD

Editor’s Note: The following article is reprinted from the Today @ PC World blog at PCWorld.com.

Microsoft has confirmed that it will be washing its hands of the Zune media player, discontinuing it once the touchscreen Zune HD launches.

WinSuperSite's Paul Thurott got word that all models of the original Zune will be phased out. The Zune HD rolls into town on September 15.

For Microsoft, killing the original Zune is a wise decision. Launched in November 2006, the media player failed to make any significant headway against Apple's iPod, hovering at about 10 percent market share. (To be fair, Microsoft set low expectations.)

Lukewarm reviews didn't help: Storage capacity wasn't high enough to compete with the iPod, and the heavily marketed "Social" feature, which let nearby Zune owners temporarily share tunes, didn't take off.

It's all been downhill since then. In 2008, video game retailer Gamestop said it would stop selling the Zune due to low demand. Later, there was a strange partnership where Zune owners would get free wireless at McDonald's, a deal that's completely fallen off the radar, and certainly didn't yield a sales boost. Then there was the infamous year-end Zune brick disaster, which caused all players to temporarily stop working at the end of 2008.

When Microsoft's 2008 earnings revealed that Zune revenue fell by $100 million, or 54 percent from the year before, it all but sealed the Zune's fate as a failure. Still, Microsoft sees hope in the brand, integrating the Zune Marketplace into Xbox Live and, of course, sticking with the name for the Zune HD.

Does the Zune's discontinuation signal the end of the iPod classic, as Gizmodo posits? I don't think so. Even though iPod sales fell 7 percent in the last quarter compared to 2008, Apple still sold 10.2 million iPods.

Besides, unless Apple significantly boosts the storage capacity of its iPod touch, there's still room in the market for a no-frills media player that can store a user's entire music and video library. Microsoft failed to muscle in on that market, so now it's time to surrender.

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