The Zune HD!

When Microsoft first launched the Zune, the player was something of a kludge. The hardware design had been licensed wholesale from Toshiba, and the fact that it had WiFi and could "squirt" songs was little advantage in a world where few people bought the device. (Several years after its launch, I have yet to run across another person "in the wild" who owns a Zune.) As Microsoft's first product that was meant to derail the iPod juggernaut, it served instead only as a sacrificial victim that the juggernaut overran without pity.
But with the second attempt, Microsoft went from competent to very good. Even today, these second-generation devices are a pleasure to use and feature a few neat tricks like WiFi sync. Industrial design was hugely improved versus the first generation, though plastic was still much in evidence, and Microsoft rolled out both flash and hard drive models along with its Zune Originals engraving program. With Zune 1's “squirting” both useless and widely mocked, the company found new a way to capitalize on the second-gen Zune’s WiFi by providing access to streaming music directly from the Zune music store. Users who paid for the $14.99 monthly subscription could access millions of tracks, then stream or download them to the Zune player, all without hooking the device up to a computer.
For its third hardware redesign, Microsoft has given up on the value segment of the market altogether. Instead, the company is rolling out a single flash-based model in 16GB ($220) and 32GB ($290) varieties and loading it up with a few premium features: a 3.3 inch OLED 480x272 screen, support for HD radio, the NVIDIA Tegra HD video playback engine, a touch screen, real metal on the front and back, downloadable apps, and a Web browser. While updated firmware is available for older Zunes as well, the decision to focus on a single model and end-of-life the other Zunes is a chance for Microsoft to reset the Zune line, focus on a single well-made machine with some new capabilities, and see if there is any traction to be had in the market.
Can it succeed? That depends on whether users buy into the Microsoft way of doing things—a way that includes paying for a monthly music subscription. Those who take the bait will find themselves hooked (in both senses) by one of the best portable music discovery experiences yet created. The full subscription experience on the Zune is now unbelievably compelling, offering something that feels like more than the sum of its parts—but consumers have so far shown little interest in subscription music services.
For everyone else, the new Zune HD is “merely” an excellent media player with a gorgeous screen, HD radio, and 720p output over an HDMI connection.