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When Microsoft announced that it was going to enter the MP3 player market with a so-called ‘iPod killer’, nobody held their breath. And rightfully so. The demise launch of Zune has been nothing short of disastrous.

Why did Microsoft decide to enter this market in the first place? It beats me. I can understand that the MP3 player market is large and growing fast, but is there really a solid fit? Microsoft is a software company at heart (I think using the terms ‘Microsoft’ and ‘heart’ in the same sentence is a bit of a stretch). Nonetheless, the company should stick to its core competency and shy away from shiny objects, such as the MP3 player arena.

Although the XBox has been somewhat of a success, the amount of money poured into such a venture has been astonishing. And yes, I know that Microsoft is a cash cow and has tons of capital to throw around. However, I think that there are better projects and ventures to throw money into.

This tech giant just seems to think it can enter any given field, pour a pile of money into R&D and marketing, and expect big things. The world has evolved immensely over the past 10 years and the playing field has opened up. For this reason, even large cap technology companies cannot become overly complacent.

Even with the enormous breadth and reach of this monolith, Microsoft is entering the game a wee bit late. The iPod culture is still running rampant. Add to that a complimentary (some might say monopolistic) MP3 download service, ala iTunes, and Apple has a stranglehold on the market. It will be very hard for Microsoft to break down this culture fortress.

Here are some interesting stats about Zune pulled from a BusinessWeek article:

• Debuted at #2 in retail sales for music players in first week.
• Slid to #5 in second week.
• More recently, the best-selling Zune model was outsold by 13 different iPod models and 5 non-Apple players.

Not exactly a spectacular launch. I don’t think that the Zune is going to keep Apple execs up at night.

As for the product itself, I have yet to delve further into its functionality. But at first glance, it seems nothing more than an iPod rip-off with networking capabilities.

It will be interesting to watch another Microsoft product slowly fade away into the abyss. That is, unless management can scheme up yet another monopolistic strategy to ward off competition and once again declare dominance.