I don’t own a portable media player, but I do know that when I have thought about saving up some money to get. one I have wanted to get my hands on Microsoft’s Zune HD. Even with the sticking point of there being no Zune Pass support for Canada. (Until recently, that is.) I was/am still a potential customer.

Then along comes Windows Phone 7 and its integration of not just Xbox Live, but also the Zune Pass. Suddenly the Zune HD had competition not just from the market leader Apple but from within Microsoft itself. Adding insult to injury, the excellent user interface that made the Zune HD so attractive was used as the basis as the user interface for the Windows Phone 7.

Not only does the Zune HD have to compete against the iPod and iPod Touch, but it also fight for survival against the growing popularity of the windows Phone 7. The sad part is that even the most die-hard tech pundits have given the Zune HD varying degrees of praise and yet it languishes in relative obscurity.

Now, with CES just around the corner, the Zune HD is suddenly going to find itself having to compete against another big gun – Samsung and Android. The competition is coming in the shape of something called the Galaxy Player and while it is being geared to compete against Apple’s iPod line it yet another threat to the Zune HD.

The fact is that everything to do with the Zune HD, other than the actual player itself, is a total mess. As rush24 at WMPoweruser.com points out:

In a many peoples eyes, the Zune HD has been a catastrophic failure as a challenger to the venerable iPod touch. The Zune’s less than optimal success have been mainly due to Microsoft’s miscues, from bad marketing decisions, lack of hardware features, zero international availability and a stupid decision not to allow access to the marketplace and SDK for third party developers.

It’s not like the Zune HD couldn’t find a place in the consumer market, regardless of  Windows Phone 7. Apple has proven that you can have two almost similar devices be successful – just look to the iPod and the iPhone (hell you could even throw in the iPad).

Yet Microsoft seems to be quite happy to let the Zune HD be a wasted opportunity. An opportunity, as rush24 points out, to be a natural gateway for the consumer to travel as their needs increase.

These devices also act as perfect gateway to getting user comfortable with using a new platform other than Microsoft, like Apple has done with the iPod and iPad. Some Android manufactures, Samsung in this case, seem to have realized this with the expected launch of the Samsung Galaxy player, an Android 2.2 device minus the phone. The Zune HD2 should have all the latest hardware features that are comparable if not better than their rivals which would include dual cameras, gyroscope, NFC chip, GPS, compass  just to name a few. It would double as a reference point for OEMs who have done a lackluster job with the current crop of WP7 hardware.

Microsoft has proven in the past that they have no problem investing heavily over a long term for a product to succeed, witness the Xbox. They have also proven that they have no problem killing off both questionable products, the Kin, as well as potentially successful products, like Courier.

They need to make that decision with the Zune HD, and make it soon. Either show it the same commitment as they have the Xbox and Windows Phone 7 or put it, and us, out of its misery. It would be a shame to see all the work and effort go down the tubes; not to mention the huge potential, but if that is the case so be it. Get it over and done with.

So, what’s it going to be Microsoft, are you going to make the decision, or are you going to shuffle along until the market makes the decision for you?

[Cross-posted at Winextra]