Just some things to consider before rating this thread with a negative vote.
It has a bigger screen than the iPod.
It has wireless functionality. Built in.
It has a radio. Built in.
It allows for music sharing between users. Built in.
It also has an online music store.
It is the same price as an iPod. I wouldn't buy one as I am not in the market for a new MP3 player however, if I was, I would definitely consider getting one. I reckon M$ has made a hit here. Although it is a clone of the iPod, it has more features. This will appeal to users. Just because it doesn't have an Apple logo on it won't make consumers run away. Don't kid yourself, people don't care who makes it, unlike us here on the forum.
As long as it works and you can do more stuff than the piece of technology you have now it is better. Therefore it will sell. At the moment the Zune is better value for money than the similarly priced iPod.
Many Zune's will find themselves inside of xmas stockings this season - in place of iPods.
aussie_geek
The iPod has been competing for its entire history with devices that had more features for the same price or *lower* (e.g. FM tuner, microphone, WMA compatibility, etc.). Why should the Zune be any different? Because it's Microsoft? Does Microsoft really have that much more clout than a Sony, Samsung, or Dell? All of those above behemoths failed to make a dent in the iPod.
So let's look at what the Zune brings to the table that is unique to the Zune (I'm not counting bigger screen or customizable background because, as I said, the iPod already competed with devices that had bigger screens, video playback before the iPod even had it, etc.):
1) Wireless capability: This is crippled for now. The song sharing is a joke. The only threat to the iPod is if the Zune software was upgraded with real wi-fi connectivity, so you could connect to the online Zune store directly from the device, or even surf to other web-based functionality (such as checking sports scores, news, weather, movie times, etc.). Maybe a future version of the Zune could even connect to internet radio or video streams.
2) Integrated Store/Device: This is really the biggest change in the Zune in that Microsoft now controls both the device and PC synching drivers and software. So synching should be more smooth now than when Microsoft had to rely on 3rd party hardware to synch with its Windows Media Player. But still, in terms of the Zune Marketplace, I think Microsoft blundered badly with its "credits" concept. That's just stupid. I mean, do you see the Amazon Store with the "Amazon credits"? What makes Microsoft think this is a good idea???? I predict Microsoft will scrap the whole "credits" system once it sees that Zune customers are buying songs at a much lower rate than iPod customers (currently the iTunes store has sold 22 songs for every iPod sold).
So in summary, I think the Zune *could* potentially be a threat in the future, but I don't think they'll even gain any traction with this release. Let's see next year when they release a Zune phone or something...