Microsoft just released their iPod killer -- except that it isn't killing the iPod. Although it looks promising, it has had a number of negative Zune reviews.
It may seem like the Zune is a total flop, after all, "it's from MS". But no, I don't think that is the problem. The problem is testing. Beta testing. Zune has so many features to kill the iPod with, but all these features came at a price to Microsoft. Obviously, they are going to have to do a lot of bug fixing.
So instead of making a product that may not have as many features as it possibly can, but polishing it, Microsoft has grabbed as many things as they could do, added it to the Zune, and then released it before it was ready.
MS was probably thinking that they had to release it before the holidays so it could better compete with the iPod. What I think is more important is that the product works as advertised, and that it works flawlessly. Then critics can only complain about what your product doesn't have, and not what it does have.
Although Zune sales seem to show it's doing well, this premature release of Zune will come back to bite them. Microsoft's traditional method of releasing a new product is to let the users to the beta testing, which is fine in an area where they dominate. But this is Apple that they're dealing with. Not much margin for error. And, Zune has got the features to compete with iPod. That's why it's selling well right now. But sales will taper off in the future, unless Microsoft does something to fix those glitches.
Then again, maybe Microsoft got afraid that the Zune would turn into the next Vista, where they're constantly Beta testing, and then it never gets released. So the key to releasing a product is to find a balance between getting glitches/bugs fixed, and getting the product released in time. Zune seems to be a bit too much leaning on the latter.