(this was released two months before the iPhone was unveiled)
I firmly believe that the first gen hardware was what doomed the Zune brand. It was this fat, heavy, clunky and just not great looking device (reskinned Toshiba Gigabeat, done in less than 18 months, I believe). Not to mention that the first software was a skinned WMP and really not good at all. Plus, it didn't work with Microsoft's DRM stuff that was still relevant at the time it was released (PlaysForSure). Music you bought from MSN Music wasn't compatible, you had to buy music from the Zune store with Microsoft Points instead. It was US-only, as everything Microsoft is. Also, it was very, very brown. It just was a complete failure.
e: Not to mention, that you shared songs by
squirting it to other players. What the fuck.
They did completely turn it around with the 2.0 relaunch (imo), but the damage was already done. Not to mention that everything was already too late. iTunes/iPod competitor in 2006, when the market was already lost. iPod touch competitor in 2009, when dedicated music players were on their way out.
But man, it was great. Absolutely great.