Apple has played a major role in the acceptance of portable media players and the adoption of podcasting. They’ve delivered a software/hardware combination with iTunes and iPods that works easily and seemlessly, and iPods have been wildly successful as a result.

Nevertheless, the state of portable media could benefit from more competition. It’s with this in mind that we’ve been watching Microsoft’s plans for the Zune portable media system. A strong competitor could force Apple and others to be more innovative and provide users with more value for their money. Strong competition could also help expand the audience for portable media.

Unfortunately, much of the initial buzz that Microsoft generated with its Zune announcement has been replaced by surprise that a company with its resources would come out with something that doesn’t manage to differentiate itself from dozens of other pedestrian iPod wannabees.

Based on Microsoft’s official announcements, the Zune platform isn’t going to offer a compelling alternative to the iPod in terms of price, capabilities, design or marketing.

Instead of speculation that the Zune will be an iPod killer, the buzz now is that the Zune will instead kill off Microsoft’s PlaysForSure licensees. If the Zune is a disappointment, you can at least reasonably expect it to have a future, unlike music systems built on the PlaysForSure platform.

We’d like to see Microsoft do more than just kill competition in portable media player market. We’d like to see Microsoft come up with something that could top the iPod, and reintroduce some excitement into the portable media player market.

With this in mind, here are 7 things that Microsoft needs to do to fix the Zune.

• Make the wireless capabilites useful – people are hyped about the idea of a wireless portable media player. Unfortunately, Microsoft has limited the Zune’s capabilities to the point that they are little more than a promotional tool for selling music downloads. This may appeal to a bean-counter someplace, but it’s going to piss off buyers that think that WiFi support means that you can do useful things like sync wirelessly with your computer, download new tracks directly from the Internet, and update your podcast subscriptions.
• Add podcast support – speaking of podcasts, it’s almost 2007, and podcasts still don’t appear to be on Microsoft’s radar. Microsoft seems intent on reinventing the iPod of five years ago – making a neat device for listening to music. Meanwhile, Apple is building out an easy-to-use portable media solution that’s becoming the dominant platform for portable media. How can the Zune capture the interest of first adopters without the ability to automatically get TheShow, Rocketboom, or any of the other tens of thousands of audio and video podcasts in the world?
• Come up with some cool hardware – the Zune is bigger and clunkier than the market-leading iPod. Apple is known for its cutting-edge design, and it has worked hard to make iPods as attractive and desirable as possible. With the Zune, it looks like the main thing that Microsoft is interested in is getting it out the door. Company leaders at Microsoft have already announced that Microsoft is willing to lose tons of money on the Zune in order to buy its way into the digital media market. It would make sense to spend a fraction of that money early on to create something that people would really find drool-worthy. Microsoft could also distinguish the Zune by making it a no-brainer to change the battery or put in a larger hard drive. They could even offer huge drives for power users as a custom purchase option.
• Lose the brown box – Zune packaging is not, how do you say, “the sexy”. Instead, it is “the boring”. It’s clear that Microsoft is trying to mimic the minimal aesthetic of Apple’s white and black packaging, while also establishing its own identity by using a brown background. Unfortunately, the brown isn’t a particularly attractive brown, many buyers won’t have any idea what a Zune is, and just WTF is that Zune logo squiggle, anyway? Maybe it’s a visual represnetation of the Zune’s networking capabilities; maybe it’s some sort of stylized “z”; but it really sort of looks like a crappy drawing of a Star Wars Tie Fighter. When the Zune hits the shelves, nobody is going to know what the thing is except for first-adopting, Engadget-reading music and podcast fans, and, for the most part, we’ve already bought portable music players. The Zune package should be updated to give people a clue about what a Zune is, or Microsoft is just going to have to spend that much more money telling people what the thing is.
  
• Offer more choice of styling – Apple loves its sense of design, so it gives you three beautiful, minimal options for its video iPods: white, black and U2. While Apple’s iPods are beatiful, style seems like an obvious place where the Zune could differentiate itself. Microsoft should offer a larger variety of Zune styles in stores, and offer custom Zunes via the Net. Apple’s been stuck with their U2 iPods for forever, in Internet time. While U2 iPods may appeal to the black turtleneck crowd, there are country music fans that want portable media players, too. There are probably a lot of classical music fans that would love to buy a player pre-loaded with a classical music libray. And for electronica fans, we’d like to see a BT or Crystal Method Zune, complete with some acid graphics and preloaded with hours of mixes.
• Don’t be stingy with the preloaded content – Microsoft has announced the content that will come preloaded on the Zune, and is a pretty stingy offering. Microsoft will include 9 audio tracks on the Zune. 9 whole songs! We’ve already shown you the Zune music video content. This may be better than nothing, but the paltry collection suggests that Microsoft is treating this as a promotional tool for its partners rather than a differentiating feature. Microsoft should give Zune buyers a DVD full of great music and make it an option to install various types of music when you load the Zune software. Give us the entire 9 symphonies of Beethoven. License them from the BBC, which offered them as free downloads last year. Give us an electronica option, and load us up with a gig or two of cutting-edge tracks. Hire a dozen music experts to mine the Internet for the best free music, and load these babies up. Getting serious about the free content would be a lot cheaper than losing money for years pushing a mediocre product. If Microsoft really loaded the Zune up, it would probably lose a few digital music downloads, butpeople only spend about $20 on music downloads anyway. Microsoft would make it up by selling boatloads of Zunes.
• Get rid of the points system – According to Microsoft, Zune users can “purchase songs individually using Microsoft Points for 79 points per track. Similar to a pre-paid phone card, Microsoft Points is a stored value system that can be redeemed at a growing number of online stores, including the Xbox Live Marketplace.” Or you could spend $.99 at iTunes. Microsoft wants you to use a new currency, Microsoft Points, to buy your music! There might be some justification for the convoluted points system, but it just makes it look like Microsoft doesn’t want you to have a clue about how much you’re spending on that new Justin Timberlake track.

These are seven ways Microsoft could fix the Zune. If you’ve got other ideas, let us know.