The news flow is abuzz this week with stats about Microsoft Corporation (NASDAQ: MSFT) and its Xbox 360 console. According to reports, the company has sold 30 million units of the gaming hardware around the world. Nintendo Co., Ltd. (OTC: NTDOY) is still in first place with 50 million Wii consoles sold. And Sony Corporation (NYSE: SNE)? Well, the PlayStation 3 is decidedly third with roughly 22 million systems moved through retail channels. And don't give me that Xbox-360-had-a-year-over-Sony excuse. Doesn't matter. Microsoft has so far played it well.

But I'd like to see Microsoft do even better when it comes to the Xbox 360. I think, out of all the investments Microsoft makes that are outside of the core operating system asset, the Xbox 360 is the one with the most potential promise.

If imitation is the sincerest form of flattery, Microsoft (NASDAQ: MSFT) must love Apple's (NASDAQ: AAPL) chain of retail stores. But, will it help Redmond to have stores of its own?

Setting up a Microsoft store is probably going to be difficult. Apple has a fairly limited number of products. Will Microsoft have its Xbox in the stores? How about its Zune of PCs running the new Windows 7 OS? Will it display business software for servers?

According to Reuters "Microsoft Corp announced plans Thursday to open its own chain of branded stores as it looks to catch up with rival Apple Inc's successful move into retailing."

Microsoft (NASDAQ: MSFT) is about to launch the latest version of its Zune multimedia player. It should avoid the humiliation. The Zune has sold about two million units since it was launched. The rival Apple (NASDAQ: AAPL) iPod has sold over 150 million units.

According to MarketWatch, "Microsoft is hoping consumers will be tempted to buy a Zune rather than an iPod due to the device's ability to more actively distribute music among friends and contacts established through the company's online marketplace."

A question to management in Redmond: Why lie to yourselves?

This is actually a perfect time to kill the Zune player. It is part of Microsoft's entertainment and device division. That part of the company makes and market the Xbox 360. With the new price cuts on the game console, Microsoft could start to lose money in that operation again. In the last fiscal year, the company made $426 million in "devices" on $8.1 million in revenue. But the two years before that, the hardware business at Microsoft lost over $2.5 billion.

Cutting prices on the Xbox will probably set back Microsoft's effort to be profitable by selling games and portable music players. Why not kill the Zune and tell shareholders the focus will be Xbox? No reason to have both products in the red.

Douglas A. McIntyre is an editor at 24/7 Wall St.

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Mr. Softee below in the comments.

You would be hard-pressed to find a professional stock trader today who didn't know that "Mister Softee" is Microsoft (NYSE: MSFT) . The nickname is so widely-used among investors that it seems to barely need explanation. But there is actually a quite simple reason for the derivation of the moniker. Here is how I imagine it taking hold:

Once upon a time in a land known as Manhattan, some Wall Street traders were enjoying some after-work beers. After about the fifth brew, these professionals began to gain insights, as they so often do today, into weighty topics.

They pondered the amorous tastes of Ginger and Mary Ann from Gilligan's Island. They debated whether "Freebird" or "Stairway to Heaven" was the greatest rock song of all time. Then, one of the traders had the burst of insight that the ticker symbol for Microsoft ("MSFT") has some of the same letters as beloved self-serve ice cream Mister Softee. And so, one of the most ubiquitous bits of Wall Street slang was born.

In case more evidence was needed that Microsoft (NASDAQ: MSFT)'s Zune is a bust, GameStop (NASDAQ: GME) has decided to stop selling the MP3 player, citing the fact the product "didn't have the appeal" that it had hoped it would. GameStop has pulled the inventory from its stores and will offer the Zunes on its website until it has cleared out the entire inventory.

In response, Microsoft told the Wall Street Journal that the Zune sales "have seen good momentum" of late and that the company had seen "great response to our spring release." Translation: "Believe us not your lying eyes."

The failure of the Zune and similar iPod wannabes indicates that Apple (NASDAQ: AAPL) may have a bigger moat than many had expected. So far no one has been able to dethrone the iPod and as stores like GameStop stop carrying competitors, Apple's competitive advantage will strengthen.

Microsoft (NASDAQ: MSFT) can't sell any Zunes, so it has come up with a plan so that it will continue to do badly in the business. According to The Wall Street Journal, Redmond "is introducing a new technology that will let users of its Zune portable devices legally share portions of their song libraries with other Zune users." To take full advantage of the new product users will have to buy a $14.99 a month service called Microsoft's Zune Pass.

None of that is going to help get share from the Apple (NASDAQ: AAPL) iPod. Not only is it the largest music download service in the US, the iPod has almost 80% of the market. Zune owners can't share music with other Zune owners because there are so few of them. Perhaps Microsoft could start a "Zune-user location service" and charge money to help people find the two or three other Zune customers in their town.

There have been hopes that the Zune would do for Microsoft in the portable music device business what the Xbox did for it in gaming. But, Apple's footprint is too large and it is adding services, like video downloads and rentals, too quickly.

Microsoft should stick to trying to buy Yahoo! (NASDAQ: YHOO).

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

It may be hard to fathom. The Zune portable multimedia player, introduced over a year ago, is selling out. Microsoft (NASDAQ: MSFT) could not give the first version away. Its attempt to take market share from the first place Apple (NASDAQ: AAPL) iPod was a very public failure.

But, the world's largest software company came out with a new and improved version for this holiday, and it appears to be a hit. According to the Associated Press "the 80-gigabyte Zune media player Microsoft launched Tuesday has sold out across the Web, to the dismay of online shoppers and delight of the world's largest software maker." There is talk of 10-day delays for Zunes ordered on Amazon.com (NASDAQ: AMZN).

The lack of availability of the device may seem like good news for Redmond, but it isn't. It may get the company some PR about the popularity of the new device, but the software company can't gain market share against the iPod if it does not have inventory to sell.

Microsoft may lack skills in terms of manufacturing hardware devices and managing its supply chain. Apple has been at the hardware business for well over two decades.

On reflection, there is nothing to celebrate about a Zune shortage, except at Apple.

Douglas A. McIntyre is an editor at 247wallst.com.

Looks like Microsoft Corporation (NASDAQ: MSFT) is interested in acquiring mobile content company Musiwave to up its stance on mobile entertainment. Musiwave gives wireless carriers the capability to offer branded ringtones, callback tones, and even full music track downloads from the web directly to a handset. With mobile ringtones being a billion-dollar industry, it seems appropriate for Microsoft to have interest. Has the revenue ship already sailed for the most part, though?

Not exactly. Musiwave's customers sound like the 'who's who' of European mobile media wireless content providers: O2, Vodafone, T-Mobile, Orange, Telus, Telefónica, and Virgin Mobile. Will Microsoft use this acquisition to push its Zune and Windows Live brands into the hands of millions of mobile phone users? Of course -- that's the whole reason behind the interest in acquiring Musiwave. Trying to find an edge to gain footage on Apple, Inc. (NASDAQ: AAPL)'s iTunes universe is no easy feat.

Sliding cellphone users into the world of the Zune-i-verse makes for a challenging but doable prospect for Microsoft. Apple iPod Touch and iPhone users can use the WiFi capability of those devices to access and download music content off the air wirelessly, and Microsoft needs the same capability. However, the difference here is that any mobile provider can be used -- not just a generic WiFi wireless internet hotspot.

Microsoft (NASDAQ: MSFT) will begin selling newer versions of its Zune digital media player as of today at national retailers like Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT). The world's largest software company will, again, try to compete head-to-head with Apple (NASDAQ: AAPL)'s iPods, current the planet's most popular line of digital media players.

In addition to replacing the original Zune player with a newer, sleeker unit, Microsoft's releasing the slimmer Zune player in 4GB and 8GB capacities to compete more directly with Apple's most popular iPod product, the iPod nano. After five years, is the world tiring of the iPod and seeking another, equally capable device with more features and an online media store to boot? Many would answer "yes" to that question, and that's the market Microsoft wants to recruit to this new line of Zune devices.

As reported on Engadget yesterday, Microsoft Corp. (NASDAQ: MSFT) is set to launch a newer, slimmer Zune digital media player in November. It's adding two new products to the Zune ecosystem as well, both of which are based on flash memory instead of using hard drives. In essence, Microsoft is trying to catch up, once again, to Apple, Inc.'s (NASDAQ: AAPL) iPod lineup, the most recent of which was announced and subsequently launched about a month ago.

Microsoft's more fascinating products out of the new lineup are the slim, flash memory-based devices. These new Zunes will come in several colors and memory capacities, with a 4-gigabyte version selling for $150 and an 8-gigabyte version running at $200. These are the exact same price point Apple has on its new iPod nano products.

Microsoft is touting the term "Zune" as more than just about the player devices themselves, but is trying to market the brand in a way similar to the iTunes atmosphere most iPod owners use to download music, movies, TV shows, podcasts and other content. Microsoft is doing one thing different, though -- it's adding a "social network" concept to the Zune atmosphere and pushing that concept with built-in wireless internet capability on all new players. Also, the Redmond giant is relaxing some of the song-sharing restrictions that have hampered wireless networking capabilities in the first generation of Zune players released last year. The large question is this: will the Zune ever be able to compete with the iPod, on any level and at any price? Round two is about to begin.

Free music downloads, sweet! Digital music newcomer SpiralFrog went live yesterday, giving away tunes to all us Thifty McLintpockets, sticking it to iTunes, asking only that we show a little love to its sponsors. Are we back in the Napster shopping-spree days of 2000, ready to grind our employers' networks to a standstill?

Not quite. The tragically titled SpiralFrog -- run by the private Mohen Inc., whose interests appear to be solely this venture -- bills itself as "the market-driven solution to illicit pirate file-sharing sites." It claims to be gunning not so much for Apple (NASDAQ: AAPL)'s iTunes or Amazon (NASDAQ: AMZN)'s forthcoming MP3 site, but instead challenging amorphous peer-to-peer MP3 networks like LimeWire and Soulseek, priding itself on being free of viruses, spyware and other nasties.

Not that this is a bad idea -- it's actually a very good, very natural idea. No need to point out that well before websites gave away content for a smattering of mortgage lenders' ads, radio, network television, magazines and newspapers were all available freely or at least affordably as advertisers footed the bills. So why couldn't music downloads work as well?

This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

The technology stories of the 1980s have a lot to do with the dawn of the PC era. IBM was about to license its personal computer technology to the open market (leading to the rising popularity of Microsoft) and Apple's computers were a hit-or-miss proposition with consumers as el-cheapo PCs made their entrance and became the dominant force in many homes and offices. Remember 1,200-bps modems and bulletin boards, folks?

Microsoft's arguably illegal tactics made it flourish in the 1990s under CEO and company cofounder William H. Gates, and the debate continues to this day whether the Windows 3.0 and Windows 95 operating systems were in part copies of Apple's MacIntosh operating system. Suggested viewing: Pirates of Silicon Valley.

Apple seemed dead in the water in the mid '90s, and Microsoft was growing by leaps and bounds. Bill Gates became the richest person in the world on paper (which would last more than a decade), and Steve Jobs came back in 1997 to try and resurrect a floundering Apple that had not done much in terms of innovation or growth under then-CEO Gil Amelio. Gates seemed on top of the world; Jobs, not so much.

This article over at PC World churned up some food for thought over the weekend for me. The author makes many decent points about how computer industry stalwarts Microsoft Corp. (NASDAQ: MSFT) and Apple, Inc. (NASDAQ: AAPL) have pretty much changed places in terms of being monopolists in their chosen industries. Now, the term "monopolist" may be the only beef I have with the argument. There have always been loads of choices for consumers in the PC and music player industry. Loads.

But the legal trouble Microsoft ran into globally about a decade ago related to its "monopolistic" practice of bundling a web browser (Internet Explorer) into its Windows operating system is not happening to Apple when it "forces" customers to use its iTunes software to make that new iPod work. It's true that alternatives existed for Internet Explorer a decade ago (for informed consumers, anyway), and the same exists for iPods, new and old. You don't "need" iTunes to make it work, but the workarounds are far beyond the patience and technical level of most iPod customers. Therefore, can anyone argue that either company has a monopoly?

It's interesting to see the author point out that Apple is doing things with its digital audio player ecosystem (iPod/iTunes) that would have landed Ole' Softie in court years ago -- something I agree with. Apple makes products that are easy to use and feed the customer need for "just make it work" simplicity, and which are elegantly-designed to boot. Hence, these products sell incredibly well. What's monopolistic about that?

Conversely, Microsoft was not the only PC operating system years ago, although it was hard to buy a new PC without having a version of Windows already installed on it (forcing you to indirectly buy the software). As I said, there were always workarounds, but most customers do not want that -- they just want these products to work, and work well. Has Apple displaced Microsoft as the new monopolist of the high-tech industry? Or, should we even use the term "monopolist" at all?

So, have you gotten tired yet of hearing about Apple Inc. (NASDAQ: AAPL)'s new iPhone that is going "change the world"? With so much attention being paid to the new iPhone, you may have missed the rumors lately that Microsoft Corp. (NASDAQ: MSFT) is planning to release its next generation of the Zune later this year.

According to our friends over at Engadget, it looks like all you Zune lovers could be in store for its next generation digital music product in time for Christmas! The new flash Zune, going under the code name of Draco, is expected to be available in both 4 and 8GB editions.

Engadget got its information from the people at Whiz Byte, who claim to have heard from a Microsoft representative that the new Zune will be out definitely in time for this year's holiday season. While there are no specifics regarding what we can expect to see when the new Zune comes out, the Microsoft source did point to three areas where we can expect to see changes:

• Updates to the Zune family itself. These new updates will include new sizes, styles and price points
• Features that will help the Zune "move towards parity with iPod"
• New geographic markets for the Zune

The devil made him do it. Or maybe it was Bill Gates.

No matter. The internets are having a jolly mock-fest over a man who took brand marketing to an alarming plateau. Our sister site Engadget is a-twitter over the happy Microsoft Zune fan who got not one, but two Zune logos tattooed on his beefy arms.

With the amount of chatter going on about this chap, you might think he'd be in for his 15 minutes of fame as a sort of underground Zune spokesman. But there are a few problems:

Microsoft Corporation (NASDAQ: MSFT)'s MP3 player Zune is widely seen as a decided also-ran next to the ubiquitous Apple Inc. (NASDAQ: AAPL) iPod. And even though Microsoft hired college students to help flack Zune during its launch late last year, there are certain tacit rules when it comes to using people to help promote a brand: One of them is that they gotta seem cool and attractive to other people.

In other words, not big-'n-geeky and living in your parents' basement. That sort of endorsement doesn't exactly help Zune's cause.

The fan in question is flying out to Microsoft's Seattle headquarters in July. Maybe the company should pay him not to do it any more favors.