Which is too bad because Zune has a lot going for it. The long-anticipated “iPod killer” from Microsoft comes in three colors (black, brown and white) but only one storage size (30-GB), and costs $249.99, the same as a 30-GB iPod.

Dimensionally speaking, Zune is a little taller than a 30-GB iPod, is just as wide, a bit fatter and weighs slightly more. Zune’s screen is also a half-inch larger than the latest iPod. If you’re comfortable walking around with an iPod in your pocket, you’ll feel right at home with Zune.

But Microsoft has said that it doesn’t plan to conquer the personal player market in the first week, and that Zune’s market share will grow in the coming months. While the player has arrived in time for holiday shoppers, no one is expecting it to take a byte out of iPod sales this season.

“It’s not even going to give the iPod a bad headache for the time being,” said Jupiter Research analyst Michael Gartenberg.

But while Zune pretty much matches the iPod feature for feature, it also goes Apple one better by including an FM tuner and incorporating wireless capabilities. With Zune, you can share songs with nearby Zuners. It’s this wireless feature that prompted Microsoft to strike a deal with Universal Music Group that gives the label a royalty for every unit sold. Microsoft is expected to close similar deals with other labels in the near future.

Zune also represents Microsoft’s commitment to entertainment. While the profit margin may not be as great on an Xbox or Zune when compared to operating systems or office software, Microsoft understands that, as entertainment devices become increasingly high-tech, it is imperative for the company to be a leader instead of a follower. And while Microsoft is five years behind Apple when it comes to marketing a personal player, the company has a long history of playing catch-up before clobbering competitors.

Eleven years ago, the browser of choice for Internet surfers was Netscape, and Microsoft didn’t introduce Internet Explorer until 1995. In fact, Microsoft was so late in introducing its Web browser that it didn’t even include it in the first copies of Windows 95. Instead, the company issued Explorer in service pack updates for the then-new operating system.

But consumers stuck with Netscape – for a while. After four years of including the browser with Windows and handing it out for free, Explorer rose to the top of the browser heap and has remained No. 1 ever since.

Of course, Microsoft isn’t giving Zune away. But the company is making sure its new player remains competitive with the current king of the hill – Apple’s iPod. In fact, Microsoft will consider its new player a success if shoppers merely consider Zune to be a viable competitor of the iPod.

“Apple’s obviously still going to be the leader,” said Robbie Bach, president of Microsoft’s entertainment and devices division. “I think that’s fair. But we want them to see Microsoft and say, ‘These are guys who are going to give Apple a run for the money.'”

Dark Side Of The Zune

But the Zune player is only half of the equation. Like the iPod / iTunes combo, Zune has its own online store, the Zune Marketplace.

You’re already familiar with Windows Media digital rights management technology. If you’ve ever bought a song from Napster, RealNetworks or many of the other online stores, you’ve purchased music wrapped in Windows Media technology. Almost every player except the iPod plays Windows Media files.

Zune, however, is different, as it plays a new kind of Windows Media. One that is proprietary to Zune and the Zune Marketplace. This means that any songs you purchased from other online stores using Microsoft Media will not play on Zune. Sure, Zune plays other formats, such as MP3, AAC, and WAV as well as unprotected Microsoft Media files, but when it comes to copy-protected tunes, the player is loyal to Microsoft and only Microsoft.

What’s more, along with using a unique form of copy protection on Zune Marketplace songs, Microsoft has also established a proprietary way of paying for the music. Unlike iTunes’ simple pricing structure where most songs cost 99 cents and CDs are priced at just under $10, at Zune Marketplace points, not cash, are the coins of the realm.

After you sign up for a free Zune Marketplace account, you must then purchase points. At current Zune conversion rates, $5 will buy you 400 points, $15 gets you 1200 points and so forth. Customers crunching the numbers will realize that a song costing 79 Zune points will cost about a quarter of a cent less than on iTunes. So there are savings, albeit minuscule, when comparing Zune Marketplace prices with iTunes.

However, Microsoft won’t allow you to buy just enough points to purchase a single track. Instead, the lowest number of points available is 400 for $5. Of course, this makes a customer commit to buying from Zune Marketplace after dropping a few bucks. But the cash-to-points conversion is sure to be a pain in the ol’ behind for Marketplace customers.

Then there’s word that Zune, as it currently stands, is not compatible with Vista, Microsoft’s next Windows upgrade scheduled for release in the coming weeks. Consumers who tried installing Zune on PCs running advance copies of Vista saw messages stating “this operating system is currently not supported by Zune.” The Zune Web site echoes that statement but also tells users to check back for updates.

For the past couple of years, a comedy video clip has made the rounds detailing how the iPod might have turned out if it had been created by Microsoft instead of Apple. The clip starts with the familiar iPod box, and, as the unit travels from one department to another, it eventually loses any cool factor it may have once had to become yet another mundane product designed by committee.

That’s not to say Zune is like that mythical Microsoft iPod. The player has plenty of cool. But when you factor in items like a point pricing structure, OS incompatibility problems and yet another proprietary digital rights management system, it becomes apparent that there were more than just a few chefs in Microsoft’s Zune kitchen. Whether there were enough cooks to spoil the broth remains to be seen.