No doubt Microsoft was dismayed that people weren't rioting in the streets for Zunes, like they were for Sony Playstations. There were no lines of people camped out for days in front of BestBuy to get a Zune. Zune is the biggest Microsoft flop since "Bob".
The Zune is the personal digital music player market's equivalent of the Lada Riva. Produced by an enormous corporation, lots of features on paper, but the product completely misses the point, the features don't work, and the thing tanks horribly. (You can also substitute "Yugo" for "Lada".)
Well, when your supposed hot new product that everyone has to have won't even work with the next-generation OS you're now rolling out onto the shelves, I'd say you have a bit of a problem.