For months, Microsoft (MSFT) has been saying the idea behind the Zune is the service, not the device, with Zune subscriptions coming to the Xbox and WinMo phones soon. But Microsoft isn’t done with hardware yet — this weekend Engadget leaks concept art of something called the “Zune HD.”
We doubt this will turn things around. We don’t know exactly what’s meant by “HD” yet, but we don’t think 720p video on a three-inch screen is going to resonate with more than a handful of consumers.
It’s hard to say what would — Apple (AAPL) has done so well in this space with its iPod, and nothing Microsoft has tried with its Zune has worked: Not “social” song-sharing, not a monthly music subscription model, and not astrology. Short of giving away the hardware for free with a Xbox purchase, we don’t think there’s anything Microsoft can do to make a dent in the market, at least not one worth the energy and money Microsoft is pouring into the project.
But Microsoft simply has never been a company to back down from a fight. We’ll keep an eye on plans for the “Zune HD,” which we imagine will be out later this year.