According to Bloomberg, Microsoft had finally made the call analysts had been expecting. The Zune player is dead. Instead of making Zune hardware for direct sale to consumers, Redmond will focus their efforts on the Zune software experience in Windows Phone 7. The company believes they have a stronger position in digital entertainment on the phone side, but they face stiff competition.
Years of poor sales seem to have finally driven the point home. In a world dominated by Apple's portable media players, Microsoft would always be playing catch up. Consumers have usually been fond of the Zune software aesthetic, and that's something that informed much of the Windows Phone 7 UI. Zune lovers need not fret right this second, though. Existing models will continue to be sold, and Steve Ballmer won't be coming to your house to take your existing Zune (we think).
If you're a Zune user, how does this make you feel? Some might say it's time for the stagnant hardware strategy to end, but the Zune HD does have its fans.