The Zune has arrived, and early reviews aren't good. But if it stopped trying to beat Apple at its own game, Microsoft could make this the perfect portable gadget

This article appears in the February 07 issue of PC Advisor, onsale now in all good newsagents.

Microsoft's Zune has finally shipped in the US and, while it's a nice piece of kit, it's definitely no iPod killer. But it could be – and should be – your portable media player of choice in the long term, provided Microsoft can revive the strategy that helped Windows PCs overtake Apple's alternatives in the late 80s. In this article we'll show you exactly how the Zune can become the all-encompassing gadget that the iPod is not.

That might seem a strange prediction, given the mixed reviews the player has received since hitting the shelves. One of users' biggest complaints has been that the Zune is a little bulky. Palm discovered long ago that a large device feels less obtrusive if it has rounded edges, but the boxy, blocky Zune suggests Microsoft ignored this lesson. Other reviewers are of the opinion that the player's take on the click wheel is just a cheap rocker switch – and a silent reminder of the charms of the iPod version.

Not bad for a first attempt

Zune loses points for its approach to DRM (digital rights management) and usability.

It doesn't support PlaysForSure – Microsoft's certification standard for music files – and is incompatible with common media formats such as DivX, OGG, protected WMV and WMA-DRM9. It plays movies, but you can't buy them from the US Zune Marketplace yet. And you can't use Marketplace to subscribe to automatically downloaded podcasts via RSS (really simple syndication).

The software installation process needs a lot of work. As with many other Microsoft consumer media products, the out-of-the-box experience is ruined by endless screens demanding personal information and Windows Live ID membership. And the Microsoft Points thing represents more needless harassment. Why can't I buy a music player without being dragged into a Windows Live membership and forced to use Microsoft's weird Monopoly money?

Some features are hard to find and poorly designed. While playing music, for example, it's tricky to get to the equaliser to adjust sound quality. And one of Zune's most hyped technologies – its Wi-Fi functionality – fails to live up to its promise. It's a good idea, but at the moment you can't connect to anything other than another Zune. And it stops playing the current music track during a Wi-Fi transfer, so you must sit in silence while waiting for the download.

It's quite a list of problems. But all these issues can be corrected; Zune is a 1.0 release and Microsoft is in for the long haul. It's simply a question of which flaws Microsoft chooses to fix – and how long it takes to fix them.

Unfortunately for Microsoft, correcting every issue on our list wouldn't turn the Zune into an iPod killer. To do that, the firm needs a fundamental change of direction.

Musical marvels

The iPod is beautiful, sleek and simple. Microsoft will never sell a media device that is more elegant than Apple's player, given the DNA of each company. What isn't inconceivable is that Microsoft could create a Zune that's more desirable than the iPod. After all, the Mac OS (operating system) is more elegant than Windows, but most people prefer Windows.

And that's how Microsoft can beat Apple: make the Zune impersonate a Windows PC. Zune cannot win by copying the iPod, but by becoming the anti-iPod. After all, the much-acclaimed simplicity of Apple's player comes at a price: the firm's 'our way or the highway' approach to locking everything down stifles customisation.

Some of the biggest iPod fans go to great lengths to overcome Apple's controls and modify their players. Just check out iPod Hacks, a site devoted to bypassing Apple's strict gadget lockdown.

Many of the hacks on the site involve the installation of Linux with a special iPod interface called Podzilla. Once installed, software can be written or downloaded that plays unsupported media files. You can also customise the interface and install applications that do all kinds of things Apple's player was never intended to do. You can play iDoom, an iPod-specific version of Doom; turn the device into a universal TV remote control; add a word processor; even use the iPod as a security key for locking Macs.

Just imagine what would be possible if Microsoft actively encouraged modification of the Zune.

Let consumers transform Zune into an Xbox game controller, a TV remote, a portable presentation device, a wireless PC hard drive or a Vista gadget emulator. Build ClearType into the player and make it the ultimate eBook reader. Give people a wireless keyboard and a Zune version of Pocket Outlook. They'll never buy another iPod.

Chit chat, no catch

In November 2006 Microsoft CEO Steve Ballmer told Bloomberg that a Zune phone was in the works. Assuming that this is true, competition between Microsoft and Apple in the mobile-phone business could change the dynamics of the Zune-iPod battle entirely. Microsoft has experience in the mobile market – and some success. For example, there are four times as many Windows-based mobile phones in the world as there are BlackBerries.

If a Zune phone does appear – and particularly if Apple launches its rumoured iPhone – Microsoft will need a killer application to dominate the market. We've got a suggestion: VoIP (voice over IP). Just imagine being able to download free software that enables you to use Zune's Wi-Fi option to make free or cheap phone calls over the internet, transforming your player into a mobile phone that doesn't require you to pay O2, Vodafone or Orange.

Consider the options

Microsoft can do all this by creating a free development environment offering tools that facilitate the creation of Zune options. This approach would play to all Microsoft's strengths: OS expertise, development tools, mobile phone OS support, peripheral hardware and third-party software partnerships.

History shows that the functionality of standalone gadgets gets folded into multipurpose devices. Apple's instinct for elegant simplicity made it number one in the media-player market, but the future belongs to customisable, multifunction players.

Apple's instinct is Microsoft's opportunity – to leapfrog its rival and usher in the next-generation media player that anyone can upgrade, customise and extend.

Microsoft will never beat Apple at its own game. But the reverse is true as well: Apple cannot win at Microsoft's game. If the Zune can be transformed into a media-optimised, extensible mini-computer that really works, the iPod is as good as dead.