I'd say that Microsoft didn't so much fail at the Zune as they realize that the PMP market wasn't a place where success could happen even after dropping billions per year. Zune became part of Xbox Live, Windows 8, and Windows Phone. Apple is the only major player in the PMP market for a reason, Android has barely even touched that space. Everyone I know who used a Zune loved the experience, although it was ridiculously easy to make fun of. The problem is, PMPs are a niche market, and upending the iPod will cost more than any profits there are to be had.