We all cheered Microsoft on when learning that the same firmware powering its freshly announced second-generation hardware would also be made available as a free update to all first-gen Zune users. Not that we really need to explain this to Engadget readers, but early adopters are far from accustomed to the kindly occurrence of getting software and feature parity for free and without having to buy later hardware.

Well, we've been playing with the new Zune hardware (as well as the software update to our first gen device), and there's no mistake about it: Microsoft's really put their nose to the grindstone, prettying it up and filling out essential features that should have been there on day one, like podcasting support and wireless syncing. But we also think Microsoft's invested so much time mastering the basics that technologically it's fallen even further behind the pack than before. Will this new hardware cure what ails the Zune? Read on for the full review.

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New Zune review

Let's knock out the upgrades first, because Microsoft's made some real improvements to Zune device line, and deserve credit where it's due. Besides the most obvious addition of flash-based Zunes in 8 and 4GB sizes and the general thinning and lightening of the flagship player, now all three devices (Zune 30 -- the new name for the first gen player -- Zune 80, and Zune 8 and 4) feature the same unified core of features, such as:
  • QVGA display
  • WiFi (now with wireless sync)
  • WMV, H.264, and MPEG-4 video support
  • MP3 and WMA audio
  • Track sharing (up to three plays and now with the ability to pass along shared songs)
The supporting software and services doesn't hurt either, like the dramatically redesigned and stylish new desktop software, the Zune Marketplace's addition of a million DRM free tracks for download, syncing with Media Center, and Zune Social.

While we can't give solid word on Zune 80 hardware (which we've yet to play with), the Zune 8's first-gen nano look and feel takes us back to a more innocent time when the 100-song capped Moto ROKR might have stood a chance (yeah right), and a Microsoft media player was but a glint in J Allard's eye. (Oh, and that pukey green takes us back to the bad-60s, but hey, matters of taste... For the record, we still love the brown Zune, so there you go.) No doubt we prefer the new touch-sensitive squircle to the iPod's tired, thumb-joint-popping scrollwheel, but we did find ourselves clicking around on the direction buttons more often than sweeping across the pad -- in which case it's really no different to us than the original Zune's four way d-pad hardware.

So while it's safe to say that many of last year's kinks have been worked through, there's still no dearth of stuff to find fault in with this year's product. Let's start with the essentials that weren't added (and that we're sorely missing), like a video download store and games (hey, contacts and simple apps would be nice too). And then there's the fact that Mac users are still left out of the party; sorry Microsoft, we're not fielding further excuses here, it's time to get your head in the game and hit Apple where it hurts. If they can develop iTunes for Windows then the largest software company in the world can develop Zune for OS X. The assumption that Mac users represent a mere fraction of consumer electronics buyers is plain wrongheaded, and ignoring the halo effect, which is drawing increasing numbers of users to the Mac platform, is actually costing Microsoft business in desktops. The fact is that these days you can't take a gadget -- even a Microsoft gadget -- very seriously unless it takes platforms other than Windows seriously. (We know the Windows fanboys in the house just winced, but deep down they probably know we're right.) And the painful part is sometimes all it means to take users seriously on other platforms is making the device mass-storage compliant.

There's also the fact that all our Zunes are virginal to this day because of the lack of other devices -- and incentive -- to share share tracks on the go. The Zune Social online network is supposed to give a boost to song sharing among Zune users, giving users the means to send along tracks on the web. But we think someone forgot to pass Microsoft the memo that millions of people have been sharing music -- DRM free music! -- for nearly a decade. In fact, it's that very online music sharing that gave the portable media market a purpose and its first dose of content, and no one's ever needed a hand from Redmond to do so. And then there are those overhyped interface tweaks, which really just amount to some eye candy, vaguely rearranged and tweaked menus, and massive home screen fonts we're sure our cataracts-ridden great aunt Gertie will have zero problem reading. We'll take 'em, but it's hardly a whole new Zune experience, if you ask us.

We'd also be remiss if we didn't point out the fact that while the new Zune lineup is priced competitively with the iPods classic and nano, technologically we still feel cheated. What's the point of a huge screen and WiFi if you can't do anything interesting with it? WiFi sharing is still a joke, there's no over the air podcast downloads, and while wireless sync is nice, but definitely not the killer app that will set the Zune apart. We're sure the eight Engadget readers that formed the Schenectady Zune Users' Group are totally stoked to be able to share and re-share tracks that can each only be played three times, but the rest of us have moved on to the concept that a WiFi-equipped portable should do start doing useful things like download new content while we're out, or at very least have a lightweight browser -- like the Archos 605 WiFi and iPod touch, to name a couple. And for our money, the new Sansa View is still the flash portable to beat for the Zunes 8 and 4; for what you're paying to get an 8GB Zune you could be getting 16GB of capacity from SanDisk -- and with a far larger screen to boot.

The first time around, we were disappointed less by the Zune's many shortcomings than by the fact that instead of creating something new, Microsoft essentially released a shoddy, hacked-together collection of white-label Microsoft products: Portable Media Center as the Zune UI; Toshiba's GigaBeat S as the Zune hardware; Windows Media Player as Zune desktop software; Urge as Zune Marketplace. Well, good on Microsoft for spending the last year rebuilding the Zune foundation and making sure to dot and cross more of the Is and Ts this time. But there's still a fundamental disconnect; Microsoft is spending all its time trying convince people to share music with Zune when the Zune team could be whipping up devices that current iPod users will actually sit up and take notice of.

Mastery of the basics is what won the day in portable media devices over the years. It's what's sold the most units to the most people, and tens of millions of iPod users the world over have proven as much by buying into the simplicity-is-key device philosophy. Rapidly accelerating iPod sales only seem to indicate happy, product-recommending customers for Cupertino, but what Microsoft still doesn't get is that the more products Apple sells, the greater the number of its customers that will churn or graduate to alternative devices that do things better, cheaper, or differently. Microsoft's role to play in this game is to chip away from the iPod's share or pick up the scraps; the position for expanding the customer base of portable media device buyers has long been filled.

For the second year running the Zune and its anti-Apple pedigree squanders its unique position to chase after the iPod-disenfranchised; it offers nothing special to ex-iPod owners, nor anything innovative to the proto-geeks looking to buy just about anything but an Apple product. It doesn't do much anything better, cheaper, or all that differently from its primary competition, and it's further behind today's leading edge devices, like the 605 WiFi and the touch, than the original Zune line was last year. When we really look at the product, perhaps FM radio aside, we can't think of a single compelling reason to recommend it to an iPod user that's ready to upgrade or switch -- and we don't even have any particular affinity for iPods.

So Zune, same place, same time in late 2008? Bring your A-game, do something new. We'll be ready.

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