When Microsoft announced the Zune last July, we had pretty low expectations for the digital media player. So much about the Zune just didn’t seem right:

Zune is possibly the worst product name in history. It has various obscene meanings depending on what language you speak.

is possibly the worst product name in history. It has various obscene meanings depending on what language you speak. Microsoft used the Zune as an opportunity to introduce an entirely new DRM system that is incompatible with the company’s previous DRM system. In the process they angered many of their partners who had built their business based on the old PlaysForSure DRM system.

Zune’s highly touted wireless capabilities are strangely limited. For example, the Zune can’t connect to the Internet or your PC.

The wireless file sharing created a storm of controversy when Microsoft announced that ALL shared files would be limited to 3 days or 3 plays, even songs that artists have specifically licensed to be freely available with no such limitations.

So how did the Zune do during its first holiday season? It all depends on who you ask.

Microsoft isn’t likely to release specific sales figures for the Zune, but if the Amazon charts are any indication, Microsoft is now the number four manufacturer of digital audio players – behind Apple, SanDisk, and Creative. Microsoft claims they’re happy with the results. After all, this time last year they weren’t even on the list. Still, number four isn’t much to brag about — especially when you look at the companies that Microsoft has pulled ahead of. Microsoft has successfully toppled iRiver, and that’s about it.

Microsoft began lowering expectations shortly after the Zune’s release. The company now claims they’ll be happy to sell 1 million units by June 2007. By comparison, the iPod was expected to sell 20 million units during the 2006 holiday season. The Zune clearly has a lot of catching up to do.

Meanwhile, there are questions about the level of consumer satisfaction among the few people who actually own Zune’s. While Amazon features some glowing Zune reviews, there are also a fair number of bitter Zune owners out there.

Zune’s software has become notoriously buggy and the installation process has been a major headache for many Zune owners.

Then there’s that wireless file sharing that’s been so eagerly anticipated by Zune fans. Some brilliant Microsoft mind decided it would be hip to call the file sharing feature “squirting“. It’s really over the top when you consider the various alternate meanings for Zune. It’s what we commonly refer to as a marketing disaster. I have yet to find a women who wants to be squirted with a Zune. I’ve stopped asking.

Fortunately the Zune only squirts occasionally. As it turns out, some content providers aren’t hip to squirting. Instead, they’ve chosen to use Zune’s DRM to prevent squirting. The interesting part of this limitation is that it only affects songs that have been purchased through the Zune Marketplace. Worse yet, there’s no indication of the restriction prior to purchase. In order to find out if a song can be shared you have to purchase it, then try to squirt it. This has to violate some truth in advertising laws, but so far no one’s bothered to make an issue of it. Probably because so far whenever someone tries to squirt music from their Zune everyone else in the room ducks.

That’s Zune product manager Matt Jubilier dodging questions from the Hollywood Reporter about the squirting limitations in the video box at the end of this post. He doesn’t really seem to understand why people might be put out by the fact that the Zune doesn’t actually share the way it’s supposed to.

If all goes as planned, 2007 will bring at least one smaller capacity flash memory player and a Zune phone. In other words, we’re all in for more Zune whether we like it or not.