Comment Everything is about sales/marketing (Score 1) 623
OK I saw all of the other posts but honestly the devices we are talking about are selling largely to the under 20 demographic that is completely driven by marketing dollars.
When you can buy an old PocketPC 2003 device on eBay for $75-100 that does everything and more than an iPod w/ WiFi/Bluetooth and the killer is it is an INFINITELY - INFINITELY better portable MP3/WMA device there is no other reason than that the target audience is simply not even entertaining this device as an option.
I am a musician and audiophile and my PPC device allows me the flexibility of SD & CF card storage and playback software that provides MP3/WMA/Ogg-Vorbis/MPC/MP4-AAC and other formats along with dynamic bass enhancement and 10 band graphic EQ along with countless other options and also allows for new audio formats to be supported when they become more popular. What's more even the old throw away PPC2002/2003 devices have WiFi so I use the thing as a portable digital music player anywhere in my house and connect to my 120GB music database on my main server PC. I have a 512MB SD card pd $15 after rebate and 2GB CF card $45 after rebate so 2.5GB of storage is pretty reasonable although small by current player standards.
So for me clearly there is no comparison in terms of the quality of the audio output and playback options on the device. But the reality is that this is more of a "geek solution" than a mass market solution to the portable music need. I liken it to linux vs windows popularity in the OS market.
I am pretty much a die-hard fan now of PDA/Phone/Media Player convergent devices and could never envision buying a device that did not include all of these features in a single device.