The Zune failed for the opposite reason: iPod had first mover advantage AND was a superior product.
Rio was there first with a better product. Apple had better marketing though and the rest was history.
Rio worked with anything and had no DRM. Any Rio was superior to all early iPods.
Apple Marketing was pretty overwhelming, but I'm afraid the Rio line was already doomed by the time the iPod began to dominate.
In fact at the peak, the iPod's market share in music players was about the same as what Android has in smartphones today.