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As a player, the Zune has some technical failings. Its built-in radio is too staticky, no match for the radios found in iriver and Samsung MP3 players. It can't record radio streams, and there isn't even a way to program station presets. And unlike those competing devices, it doesn't have a built-in voice recorder. Also, while I found most of the interface to be pleasant, I did run into some strange starting and stopping issues. For instance, say you're listening to a song and browsing through your music when you're suddenly interrupted by someone. You hit the Play/Pause button and your music stops. But when you hit Play/Pause again, it will start playing whatever song you're currently highlighting, not what you were listening to. On the iPod, this is handled by having separate buttons to select highlighted songs and to play and pause what's "now playing."
While the Zune Marketplace is fairly similar to the iTunes Store, at least for music, Microsoft has introduced Microsoft Points in lieu of dollars and cents. As I understand it, this is a way to guarantee credit-card transactions of $5 or more the minimum amount of points you can buy is 400, at that price. The trouble is, because there's an exchange rate of 80 points to the dollar, it's easy to think you're paying less than you really are: Tenacious D's new album lists for 1,200 points. That's $15 to you and me. (It's currently $10 on iTunes, with digital booklet.)
I've got mixed feelings about Zune. I know that the wireless connectivity will not sway me, but I'm not sure it won't be a selling point for younger people who are more often surrounded by crowds of peers. I just don't understand why Microsoft chose to launch a 30GB hard-drive-based player when the kids these days want cheaper, cuter flash players not just the iPod nano but the SanDisk Sansa and many others. Today's hard drive business is all about video playback, and the Zune certainly offers that, but Apple's movie and TV store will keep them ahead of Zune's music-only retailer. (Microsoft's new movie and TV store for Xbox is incompatible, though ironically it will use the same Microsoft Points currency for transactions.)
At this point, the Zune isn't an iPod killer, though it may be an Urge killer, a Napster killer and a Rhapsody killer – none of these services work with the Zune, and none of their compatible players work with Zune Marketplace. For the time being, people will still decide between Apple and "other." Zune will be just another choice to be made once someone dares to be different, and says "no" to Apple.