Microsoft zunes out?

by Jason Gross

14 November 2006


Thanks to the millions of dollars that the nice people at Microsoft have put into advertising, you’ve probably heard that they have a new “iPod Killer” called Zune available although they don’t tout it as such.  Now why would that be, you wonder…?
Could it be that MS is savvy enough to know that they probably won’t topple Apple from its perch?  If they did play up how they plan to take over the market and they flop by holiday time, they’re dead meat.  They look like idiots and they loose credibility in this player battle.  Of course, the consumers will make the big decision by holiday time about which brand is tops.

Other than their ad budget, one big thing MS has going for it is that it still knows the power of deal making.  Sometimes this ran afoul of the law (i.e. the Justice Department lawsuits claiming that MS was trying to drive competition out of business) but they now figured out a way to make smarter deals.  They actually told the labels that they’d get a taste of the action from Zune sales, giving them extra incentive to play along: Microsoft Strikes Deal for Music.  This also feeds the labels’ resentment against Apple for declining to do flexible pricing for songs, now that they’ve found a friendlier partner.

So far though, the reviews of the Zune have been decidedly mixed.  Most articles read like MS press releases but one of the truly fair-and-balanced ones was this NY Times column: Trying Out the Zune: IPod It’s Not.  While playing up Zune’s strong points (the new navigation, the wireless angle, the ability to share songs with other users), the Times article also notes many shortcomings that make the new product not overpoweringly attractive compared to the ol’ Apple product.  Also, the sales system that MS has dreamt up isn’t exactly intuitive compared to the simple $1/song model that Apple spawned: Zune marketing scheme.

With even MS giving muted optimism about Zune’s future, it’s hard to believe that it’ll overtake Apple come Xmas ‘06.  They’re at least hoping to get a hold of part of the market and say share a chunk of 2nd or 3rd or 4th play with say, Creative.  Some pundits think MS’s deep pockets mean that they can keep this on the market long enough to mount a serious challenge to Apple but that didn’t save their old PlaysForSure system, which doesn’t work with Zune and will likely be phased out.  So is that their M.O.?  Push an inferior knock-off until they loose interest, try something new and then strand the old users?  Not exactly a great way to inspire brand loyalty.

For holiday time, I know what I’m getting for an MP3 player.  I don’t see a compelling reason to invest in MS’s experiments and Apple still has its goofy, user-unfriendly Digital Rights Management system (AAC) no matter how cool its product looks.  That’s why I’m buying a Creative player- they still believe in non-DRM MP3 coding to make the music easy to play and transfer.  Should be easy to figure out but evidently it isn’t to the two big players.

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