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Shame on you if you don’t even know what the Zune is (go catch up here). So why is the Zune causing Steve J. and Co. (a.k.a. Apple), to stay late at work and then have nightmares throughout the night?  Here are five (simplified) reasons written by Mike Elgan from the Raw Feed:

1. Microsoft is hatching a consumer media “perfect storm.”

Zune will be supported and promoted and will leverage the collective power of Windows XP, Windows Vista, Soapbox (Microsoft’s new “YouTube killer”) and the Xbox 360. The Zune interface is just like a miniature version of the Windows Media Center user interface and is very similar to some elements of Vista.

The Zune will plug directly into the Xbox via a standard Universal Serial Bus cable—a fact Microsoft will drill into the heads of Xbox users on the Xbox Live online gaming service. The Zune Marketplace will be integrated with, and promoted by, the Xbox Live Marketplace.

2. The Zune is social and viral.

Since the iPod first came out, times have changed. The rise of social networks like MySpace.com and viral Web 2.0 sites like that of YouTube Inc. have transformed the expectations of young people about sharing and using media. In the context of these trends, Apple is old school. But the Zune, with its peer-to-peer wireless file sharing, is both social and viral. The Zune isn’t just a solitary music player. Think of it as a portable, wireless, hardware version of MySpace.

3. Zune may have more programming.

While Apple launched its movie business with movies from Disney (where Apple CEO Steve Jobs sits on the board), Microsoft has already lined up Twentieth Century Fox Film Corp., Paramount Pictuers, Sony Pictures Entertainment, Universal Pictures, Warner Bros., Lions Gate Entertainment Corp. and MGM Pictures. For TV shows, Microsoft will offer programs from A&E, Animal Planet, the BBC, The Biography Channel, Cartoon Network, CBS, Comedy Central, Discovery Channel, Discovery Health Channel, Discovery Kids, E Entertainment Television, Fine Living TV Network, Fox, Fuel TV, FX, HGTV, The History Channel, MTV, Nickelodeon, Nick at Nite, PBS, Speed, Spike, Travel Channel, TV Land, VH1 and others.

4. Zune’s screen is better for movies.

The Zune’s screen is just as good—and larger than the iPod’s. More importantly, it can be turned sideways for a wide-screen movie experience.

5. Zune is actually pretty cool.

The Zune is unlike any product Microsoft has ever shipped. It’s actually very nicely designed, surprisingly minimalist and (dare I say it?) “cool.”

The iPod is the soul of Apple’s entire business. Apple has been relatively successful at winning converts from Windows to Mac OS X, for example, in part because its whole product line basks in the glow of iPod’s success, hipness and ubiquity. Apple has recently and preemptively lowered the price of iPods, announced an iTV set-top box—which will ship later than Vista—and is probably working feverishly on a bigger-screen, wirelessly enabled iPod.

Read [Computer World]