IMHO, it's time for Microsoft to stop trying to compete in every possible market, and instead focus on software. They could start by creating a version of Windows with fewer problems :)
Where is that coming from, you ask? Well, I just saw where GameStop is no longer planning to stock Zunes, due to insufficient demand:
"We have decided to exit the Zune category because it just did not have the appeal we had anticipated," said a GameStop spokesperson. "It (also) did not fit with our product mix." GameStop made the decision about a month ago. GameStop said it will sell Zune players online until it clears out its inventory.
That's got to bruise a few egos in Redmond, but it could be a good thing - if they pay attention to the signal it's sending.