Spotted in Engadget:

Microsoft's newly-announced layoffs and declining profits aren't the only bad news in Redmond -- according to the company's quarterly statements, Zune platform revenue decreased $100 million, or 54 percent compared to the same quarter last year, due to falling device sales.

It's too early for this to be due to the year end lockup issue; I guess it's just not picking up any traction at all. Not a huge surprise; the iPod continues to be a great combo with iTunes, and the iPhone and Touch have sucked all the oxygen out of the space. I'm sure they'll stick with the device, but it looks like they have their work cut out for them.

Technorati Tags: ipod, zune, mp3 player