The Zune HD’s lack of a compelling software market will make it nothing more than a repeat failure, according to mobile developers and an analyst.

Microsoft on Tuesday released its newest media player. Priced at $290 for the 32GB version, it’s packed with impressive hardware features, including a vibrant, touch-sensitive OLED display. Still, the hardware alone won’t be enough to make the device a success, observers say.

“They apparently had no idea the App Store was coming or was going to be big,” said Phillip Ryu, co-creator of the popular iPhone app Classics. “This all reeks of last-minute scrambling.”

The center of criticism is Microsoft’s Zune Marketplace, the Zune HD’s version of an app store. But it’s not really a store: Third-party developers cannot easily create apps to be sold through Zune Marketplace. In fact, no apps will be sold at all.

Instead, Microsoft has handpicked third-party companies to code apps that will be offered for free in Marketplace. The initial software available for Zune HD will include games, a weather app and a calculator. And in November, Twitter and Facebook apps and some 3D games will launch in the “store” as well.

Unlike other mobile stores, Microsoft’s Marketplace is essentially closed to outside developers.

That’s an unusual move in the mobile tech landscape. By contrast, Apple’s App Store allows anyone to submit iPhone and iPod Touch apps, although Apple exerts stringent (and often capricious) control over which apps make it to the public. Google’s Android Market is completely open to any developers who wish to offer apps for it. Research in Motion, Verizon, Nokia and Palm have also all opened mobile app stores to compete with Apple’s.

Even Microsoft is drafting developers for its Windows Mobile 6.5 app store — but oddly enough, the company is not integrating the same store for its Zune media player.

Microsoft’s Zune marketing manager Brian Seitz said the Windows Mobile Marketplace is being separated because the Zune HD has a different focus than smartphones. Seitz said the Zune HD’s focus is music and video playback.

However, Microsoft’s message is contradictory, because Seitz later said that since the Zune HD features Wi-Fi and not a constant cellular connection, the device would focus on gaming.

“The thing that Zune HD is made for is really rich music and video playback experiences for people,” Seitz said in a phone interview with Wired.com. “We know there’s other things folks want to do with these devices that are sometimes connected … and those apps are typically games.”

Seitz added that the Zune HD’s primary goal is not to compete with Apple’s App Store. However, he did acknowledge the Zune HD’s main competitor is the iPod Touch.

Matt Drance, Apple’s former iPhone evangelist and current owner of Bookhouse, an iPhone app development company, said Microsoft was wise to shy away from directly competing with the App Store, because the tech giant is already too far behind in this market segment.

“I’ll give [Microsoft] credit for acknowledging they’re not ready to compete,” Drance said in a phone interview. “They’re going to have to do something really special at this point. When you’re staring in the face of 75,000 apps in the App Store that have been downloaded 2 billion times, you can’t just say, ‘Hey, me, too.'”

There’s very little Microsoft can do with the Zune HD at this point, MKM Partners analyst Tero Kuittinen said, because the software that launched with the Zune is too underwhelming to drive momentum for the gadget.

Kuittinen questioned why Twitter and Facebook apps were not immediately available for the Zune HD upon launch, because practically every smartphone today supports this type of software. He added that Microsoft failed to communicate to the public, via marketing and media, what exactly the Zune HD would do other than play music and video. This added up to a poorly executed launch, he said.

“To get the maximum impact you have to have the software services the moment you’re ready,” Kuittinen said. “When you start bringing it out later it dilutes the impact.”

“We’re getting close to Christmas now, so if you don’t start now telling consumers what the device can do, it’s going to be kind of late to give them Twitter app in November,” Kuittinen added.

What, then, should Microsoft do? Lower the price, suggests Kuittinen, who believes the price difference between the iPod Touch and the Zune is not a strong enough selling point. Microsoft is selling the 16GB Zune HD player for $220 and the 32 GB version for $290.

Apple’s iPod Touch comes in three models: $200 for 8GB, $300 for the 32GB and $400 for a 64GB model.

The iPod Nano, by contrast, costs $180 for a 16GB version, making it — price-wise — another possible competitor to the Zune HD.

“What exactly do they have to lose at this point?” Kuittinen said. “Why not just go to $130 or $140? They’re going to lose money anyway.”

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Photo: Jon Snyder/Wired.com