The iPhone was revolutionary because it was built around the world's first-ever, publicly available third-generation user interface. Other examples of this UI include Microsoft's Surface table-top PC and, CNN's election-coverage "Magic Wall."
This third-generation UI involves multi-touch, of course, and also gestures (shapes you draw on screen send commands to the system), physics (objects move as if they have mass and momentum), 3-D and the minimization of menus. Within five years, all new PCs running either Windows or the Mac OS will have this kind of UI, and the mouse will become a thing of the past.
So comparing the Zune UI to the iPod Touch UI isn't like comparing AM radio to FM radio. It's like comparing radio to television.
The idea that Microsoft would simply build mobile phone electronics into a big Zune and try to compete with Apple is truly absurd and would be a lousy idea. Microsoft is better off supporting its handset partners with its Windows Mobile OS, rather than embarrassing itself with an "iPhone killer" that ends up only killing itself.
The ' insanely great ' Zune phone you'll never see
The reason the iPhone shocked the handset market and rocketed to the number-one handset make-and-model in the world is that the iPhone introduced a totally new way to use a mobile phone. The third-generation UI really was different, and everyone loves something new and exhilarating.
The iPhone is great, but it's not perfect. In fact, it's pretty big and clumsy to hold, gets horrible battery life and often gets poor 3G reception. These flaws represent opportunities for Microsoft.
Microsoft could and should build a Zune phone, and one that introduces a totally new way to use a phone. Instead of an "iPhone killer," Microsoft could sell an "anti-iPhone" using the Zune form factor. No, not the big, iPhone-sized, hard-disk-based Zune form factor. The tiny flash-based Zune 16.
The Zune is in fact pretty cool. The player has a bad reputation mainly because Apple iPods are so great and so dominant. It's like being the second best golfer after Tiger Woods. You're almost the best in the world but nobody cares.