Microsoft's introduction of the Zune portable media player last year was inauspicious at best. It started with a viral marketing campaign in mid-2006, aimed at reaching out to the hip, cool, and compulsive youth market that the Zune team so desperately wanted to court. Then, instead of keeping the tech press up to speed with the device and its associated software and online service, the Zune team made what I personally consider to be its biggest mistake: It briefed a handful of digital media bloggers instead. The Zune, as everyone now knows, arrived with a thud. And though the device's marketing campaign was called "welcome to the social," the silence, as they say, was deafening.

As I noted in my Zune review, however, the device isn't a total dud. It featured a bigger screen than the iPod of the day, had a more grippable and attractive exterior, complete with a cool "double shot" dual color effect. It had wireless features in a day and age when no mainstream devices offered this functionality (read: no iPods). It also had a few disadvantages. The Zune's online service, Zune Marketplace, offered just music, and none of the TV show, movie, podcast, audio books, games, and other content iPod owners find in spades on iTunes. The PC-based software you used to manage the Zune and access Zune Marketplace was an utter disgrace, with huge performance issues. And where Apple's iPod came in a range of sizes and form factors, with Zune, you just had the one unit: A middle of the road hard drive-based model with 30 GB of storage. The Zune 30, in Zune-speak.

Depending on how you look at it, the Zune's first year was either an epic disaster or a decent first step into the market. Compared to the iPod, the Zune didn't exactly fare very well; Microsoft sold about one million Zune devices in its first 8 months of availability. But Apple sold over 32 million iPods in approximately the same time frame. Of course, Microsoft prefers to compare Zune sales to the single iPod model that it technically competes most closely with, which was a 30 GB iPod for much of that first year. And according to the marketing mavens at NPD, Zune was consistently the number two selling MP3 player in the market for hard drive-based devices that cost $250 and less. Sure, it was a distant number two--the Zune typically controlled only 10 percent of that market--but look at it this way: Just by entering the market, Microsoft was able to jump ahead of products from Creative, Samsung, iRiver, and others, and do so with its very first device.

Looking back over the past year, I fault Microsoft for two things. First, the company completely blew its chance for a big entry into the market, and there's no way to undo that now. Second, after promising to move quickly on new features (podcasting support anyone?), Microsoft instead let the Zune sit and simmer all year. Sure, we got new colors over time, augmenting the white, black, and weird brown Zune 30s that debuted back in November 2006. But the software never really improved, and thus the Zune owner's experience never really improved either. Now, a year later, I can tell you that this happened so Microsoft could focus on the announcements discussed here. But it was a tough time to be a Zune owner. Hopefully, news of what's coming this year will perk things up a bit.

That's because Microsoft is getting ready to launch its second generation Zunes. There are new devices, new capabilities (all of which, yes, will be ported back to the original device), new PC software, a completely redesigned Zune Marketplace, a completely new Zune community service, and even new accessories (that, yes, will also work with older Zunes). The one promise that Microsoft made early on, and appears to be making good on now, is that they are not abandoning this market. They are in it for the long haul. And while Zune 2.0, as I think of it, is obviously not good enough to suddenly push Microsoft's device beyond the iPod, it may just be good enough to help it snag some market share and move things forward. You never know.

Let's take a look at what's happening.

New devices

First up, as you might expect, Microsoft is filling out the Zune family with two new products. Note that I said "filling out" there: The company is not replacing its existing Zune 30 product but is rather augmenting that device with three new devices and two new device form factors. "We're going to continue selling the Zune 30," Zune marketing director Jason Reindorp told me in a recent briefing. "But we're also going to update that device with new software and features."

Coming in on the ultra-portable end of the market are two flash-based devices, the Zune 4 and Zune 8, which sport 4 GB and 8 GB of storage, respectively. The Zune 4 and Zune 8 will come in black, pink, and green matte designs, as well as glossy red versions. Physically, these devices are identical.

On the high end is the Zune 80, with 80 GB of hard drive-based storage. The Zune 80 will come only in black. All new Zunes will feature a subtle new version of the double shot color effect, so that they hang together visually with the existing product. "They're meant to be part of the same family," Reindorp said. All of these devices are considerably thinner than the current Zune 30.

The pricing for all four models will break down as follows:

Zune 4 - $149
Zune 8 - $199
Zune 30 - $199
Zune 80 - $249

In what I consider to be a classy move, Microsoft is imbuing each Zune device with exactly the same features. (And yes, this includes the original Zune 30, which will require a software update.) Think about that for a second: When it comes to purchasing a Zune, you will only have to factor in size and pricing, unlike Apple's complicated iPod line, which seems designed primarily so that each model will not cannibalize sales of their other devices. And just because you bought a Zune last year doesn't mean you're out of luck. What a concept.

What are these new features, you ask? Each device will include a brand new user interface that Reindorp says is "more 2D" than what's out in the market at the moment. "You'll see bigger menus with nice aesthetic treatments," he added. All will have audio and video playback support, an FM tuner, and Wireless Send. This last feature has been updated dramatically, and will hopefully no longer be the source of jokes. Instead of the "3 days, 3 plays" stigma from the previous year, you now get "3 plays with no time restrictions." "That takes one level of restriction off," Reindorp said. "And if you receive content from another [Zune] device, you can now send it on to someone else." All Zunes will have customizable home screens, as did the original unit, a feature that proved to be quite popular with customers.

The two new device form factors (Zune 4/8 and 80) were designed from the ground up by the Zune team's industrial design group. These new devices feature a new navigational control called the Zune Pad. This pad looks similar to the directional button that's on the Zune 30, and like that button, it can be clicked in various ways. But the Zune Pad's surface is touch sensitive, and you can brush against it to navigate. "It's a really delightful interaction, especially for really long lists," Reindorp told me. "If you flick it a few times, the scrolling gains momentum. And you can stop it by tapping the button, and put the brakes on, so to speak." If it works as well as advertised, it could be the best of both worlds: If the device is in your pocket while working out or moving around, you can navigate by feel, like before. But if it's out and in front of you, you can brush away. I'm curious to check this out.

All Zunes will now support wireless synchronization as well. Microsoft did this in response to customer research, during which it discovered that many MP3 player owners don't regularly synchronize their devices with new content, either because they don't think to do so, or because they actually find it difficult. So the Zune wireless sync is designed to address this problem.

"We tried to make it so that the device looks after itself," Reindorp said. "If you walk into your wireless network at home and connect the Zune to power or a dock, it will reach out and sync up with the PC after a minute or two." Microsoft requires a power connection for automatic wireless sync in order to protect the device's battery. But if you want to manually sync it wirelessly, you can do so from the device's menu system. Brilliant.

Zune PC software

The Zune software, which I believe is simply called Zune, has been completely rewritten from scratch, so you can kiss that Windows Media Player-based Frankenstein from the first generation goodbye for good. Reindorp didn't mention this, but I was told previously that people responsible for the Vista version of Media Center worked on this software, and it shows in the streamlined simplicity of the interface.

"It's much easier now to manage your own content and then find new content," Reindorp said, referring to a new search feature that displays search results in a two pane view: On the left, you'll see content from the local computer, including podcasts, video, whatever you may have. On the right, there's a similar view, but into the Zune Marketplace.

"We've really minimized the number of menus," Reindorp added. "Everything you can do is accessible via right-click or drag and drop. It's super, super easy." The Zune software also offers a great view of what's on your device, what Reindorp called a "command center for the device." If you have a red Zune 8, for example, the software will display an icon that is visually identifiable as that exact device. If you click on it, you'll have quick access to recently synced items, items remaining to be synced, and, if there have been any problems, sync issues.

And yes, you read that right: Zune, finally, will natively support podcasts. (More on this below.)

Zune Marketplace

As with the PC-based software, the Zune Marketplace--Microsoft's online content service--has also been redesigned and is no longer using the awful URGE front end from the first time around. "This is an important point," Reindorp told me. "As with the software on the PC, the Marketplace is now our code from the ground up. The Marketplace and the PC software are very visual all the way through. You'll see huge pictures on the front page, chart info, and a lot more genres, making it easier to navigate."

The new Zune Marketplace is dramatically different from any other service out there, with full-bleed photography, biographical information, music, video, podcasts, playlists, and so on. Microsoft says it will have 3 million tracks at launch. But brace yourself for maybe the best news of all.

The company is going to launch with one million DRM-free MP3 tracks. But these aren't just MP3 songs, they're "pure MP3s," devoid of any watermarking or tracking technology. Reindorp tells me that the company "absolutely refused" to go in that direction, or settle on non-standard audio technology. So the Zune's DRM-free tracks will be pure MP3. Halleluiah.

Also, the Zune Marketplace will finally expand beyond just music, and will now offer music videos and (free) podcasts. There will be about 5,000 music videos at launch, I was told. And the podcasting interface is "very visual and super clean," Reindorp said, making it very easy to manage podcasts.

For now, at least, Zune Marketplace won't sell TV show downloads, but that's going to happen in the future. "We have a different idea about what that model can look like, and it's going to take a bit longer to get the rights worked out." To tide over its customers, however, the Zune can automatically synchronize with Recorded TV content from the Vista version of Media Center, so there's at least some way to get television shows onto the devices. Sadly, this part of the discussion led to the fact that the new Zunes will be limited to 320 x 240 resolution like their predecessor; the Zune software will thus transcode Recorded TV shows down to that resolution. That's bogus.

New community site

In addition to the Zune software and Zune Marketplace, Microsoft is also launching a new community Web site called the Zune Social. This site is centered around two things: Your own musical tastes and the artists you enjoy. You won't need a Zune to utilize the site, which is interesting, and anyone who has seen a Xbox 360 Gamertag online will surely recognize what's going on here. Essentially, you create a Zune Card using your Zune Tag (which is associated with a Windows Live ID). You choose a picture, and then list your favorite songs and albums.

In the background, the Zune Card tracks what you listen to on the PC and Zune, and then reflects that on the Web-based Card. "It's really quite pretty," Reindorp told me. "You'll see a line of album art, which is an active line of content. As you mouse over, it rotates across the Card, so you can see the whole list." You can mouse over albums, sample them, mark them as favorites, send them to someone else, and, yes, buy them. Similar to the Xbox Live friends lists, you can define your circle of friends, see what they are listening to, look at their cards, and then sample music based on that. "It's a neat way to find new content," Reindorp added.

In a related vein, artist pages on Zune Marketplace will display information about fans of the bands. So you'll see links to top fans in the community, and can see what they're listening to. "This is all very intentional," Reindorp said. "When you see this content on the community site, and want to download or buy it, you click, and, full circle, you're in the Marketplace. We're blurring the lines between the community site, the Marketplace and the PC software quite intentionally."

When the second generation Zune launches, the Zune Social will be in beta and Microsoft expects to improve it dramatically over time. "This is just a first step for community," Reindorp told me. "We have lots of ideas about improving this, but we have to take one step at a time. One thing we will do, though we're not sure when exactly, is link Zune Social to social networking sites like Facebook and MySpace." Microsoft doesn't see Zune Social as a competitor to those services, because Zune Social is centered solely on music. But a lot of people already have Facebook and MySpace pages. So the company is now testing a way of taking the Zune Card and putting it on those sites, as well as on blogs and other Web sites. "It's pretty cool," he added. "As your Card updates, the site will be updated. And the performance of that Card will be like that on the community site."

Accessories

In another dig at Apple and its consumer-unfriendly policies, Microsoft is doing something a bit different with accessories. That is, it's not automatically obsoleting old devices or accessories just because something new is out now. "This is a minor thing, maybe," Reindorp said, "but I like that we're doing this. We went out of way to ensure that all of the new accessories work fine with the original 30 GB devices. Likewise, all of the original accessories will work with the new devices." Bravo.

As before, Microsoft will be grouping accessories into packs, such as the Car Pack, AV Pack, and Cable Pack, in order to make it really simple for consumers to get exactly what they need.

Timing

Microsoft plans to launch the new Zune devices, Zune software, Zune Social and Zune Cards, and the new Zune Marketplace in mid-November. I will have a full review of the new devices and services available by then, so please stay tuned.

Final thoughts

While I will need some hands-on time with the new Zunes before I can render an educated opinion on these devices, this much is now clear: Though Microsoft has moved achingly slow over the past year with regards to updates, existing Zune users have much to cheer about, as every single new software feature will be available to them. The new Zune lineup seems nicely fleshed out, though Microsoft is still lacking a true video device like the iPod touch. On the other hand, the Zune 4 and Zune 8 seem like better pure music devices than Apple's new iPod nano, which went wide in a weird bid to attract video viewers.

None of this is enough to catch up with Apple, of course, but in a market like that for portable entertainment, where yearly updates are the norm, Microsoft is moving at a steady and sure pace. My guess is that they'll chew into the iPod's lead a bit in the coming year. And that a combination of iPod fatigue and distrust of Apple (both industry-wide and with consumers) will lead to some defections. Do the new Zunes have what it takes? We'll find out in November. See you then.