Will we ever see a Zune on this (eastern) side of the Atlantic? Ever since its launch in September 2006, we've been asking Microsoft UK whether eager customers - come on, there must be some - in the UK and Europe will see Redmond's would-be giant-killer in action.

Except that increasingly it looks like the Zune may be put to sleep with the fishes before it crosses the water.

Take the latest from Marketwatch, which points out that while the iPod has developed into a wide and of course strong line, taking in everything from the tiny shuffle through the nano to the "classic" to the touchscreen iPod Touch, the Zune remains much the same, apart from having different storage capacities.

"If Zune were going to make a strong move against the iPod, it already would have," said IDC analyst Susan Kevorkian.

(Have to love how they call these things "Zune", not "the Zune", as if they were humans or something.)

Worse, revenues for the Entertainment and Devices division declined - along with pretty much everything at Microsoft - in its fourth quarter. However, the non-gaming side of E&D (ie the Zune and Mediaroom, Microsoft's IPTV service) fell by 42%, or $291m, in the fourth quarter - far more than the rest of Microsoft, where revenues declined 17%. (For E&D overall, revenues declined 26% for the quarter to $1.189bn, though losses narrowed to $130m.)

Now, digital music players are hurting: Apple saw its first year-on-year per-quarter fall in iPod sales (by 11%) despite reporting record revenues.

Now, Microsoft says it's going to come up with a touchscreen Zune - let's call it the Zune Touch for simplicity - but it may be too late. At MarketWatch:

"The market reception for Zune is so disappointing that many retailers have even stopped selling it altogether," said George Kurian, a vice president at Tradition Capital Management LLC, which owns Microsoft shares.

In the US less than 5% of people with a digital player say they have a Zune, while about 61% have an iPod. Worldwide, of course, that share will be even tinier for the Zune (because it's not on sale anywhere outside the US, for reasons Microsoft has never felt able to share.) And as the year has gone on it's got worse: NPD Group says market share (ie, what's selling) puts the Zune at 2% and the iPod at 70% or more.

The question is, what is Microsoft trying to prove with the Zune? That it can make an also-ran music player? It's done that. Aren't there other things to do now?

"Microsoft should abandon Zune and follow Apple's strategy to try to make its presence felt in the high-growth smartphone sector," Kurian said.

Ah. Well, that's a nice idea. You mean use that Windows Mobile (now renamed Windows Phone) product? Yes. Well,

We have a longer piece about where Windows Phone is going in tomorrow's print section (and soon to be online) but just consider this graph:



This shows sales of the iPhone vs Windows Mobile licences. The periods compared are Microsoft's financial years, so we've matched the quarterly iPhone sales against those for Microsoft.

The depressing news for Microsoft: the iPhone has outsold Windows Mobile in the past year (we've not been given numbers for the latest year, but as Microsoft isn't shouting them from the rooftops - and didn't hit its 20m target that it had been bruiting in 2008 - we can assume that sales were steady).

The even more depressing news? Those numbers for Apple don't include the iPod Touch, which aren't broken out separately. But the iPod Touch sells even more than the iPhone.

So do you expect to see the Zune land in the UK before it's taken out the back of the Microsoft campus and shot, along with the Spot data wristwatch, the Smart Display and those other "good ideas" that weren't?