After half a decade of fruitless attempts to compete with the iPod, Microsoft is said to be phasing out the Zune, apparently no longer planning to release updated versions due to low demand.

Bloomberg‘s anonymous source says the battered spirit of the ignored device will live on in the form of software integrated into mobile phones.

So, world, you won’t have the Zune to kick around anymore. Not that many people will notice, because the Zune couldn’t crack the top five of music-playing devices last year. The iPod dominated the market, with 77 percent of unit sales.

If you encountered a Zune during its brief but still far-too-long life, what were your fondest memories of the little music engine that couldn’t?

UPDATE: A Microsoft executive in the Zune department checked in on a forum in an attempt to clarify the device’s future, or lack thereof.

Microsoft Said to Scrap New Zune Models After Failing to Break IPod’s Grip [Bloomberg via Metafilter]

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