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iPod Has Nothing To Fear From Slow-Starting Zune

narramissic writes, "Looks like Apple's iPod has nothing to fear from Zune this holiday season. In a research note published Tuesday, PiperJaffray senior research analyst Gene Munster writes that 'during its launch week on Nov. 16, Zune held the seventh spot on online retailer Amazon.com's top 10 best-selling MP3 players list, and it fell from that spot to 13 on the list only five days after launch, on Nov. 20.' Even worse, only 8% of retailers surveyed by PiperJaffray recommend the Zune to customers, while 75% recommend Apple's iPod." The article notes Apple's 5-year headstart in the portable player market and Microsoft's stated intention to invest heavily in the Zune over the next several years.

28 of 422 comments (clear)

  1. Did they plan on this? by TrippTDF · · Score: 4, Interesting

    Did M$ plan on having a flop out of the gate, planning on 2nd and 3rd generations to really go after the iPod? M$ never gets anything right the first time, so maybe it's not a big deal to them that it flopped?

    1. Re:Did they plan on this? by Knuckles · · Score: 5, Informative

      What about it? It lost 4 billion dollars and finished a tiny bit ahead of the Gamecube in market share.

      --
      "When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
    2. Re:Did they plan on this? by jandrese · · Score: 4, Funny

      Also, each one comes with a free pony.

      --

      I read the internet for the articles.
    3. Re:Did they plan on this? by pilgrim23 · · Score: 4, Insightful

      I downloaded the Zune SW with Firefox (that was an experience in itself). I then downloaded it with IE 6. Both on a XP box SP1. I was curious... the IE 6 download quikly, the firefox took a good 2 minutes.... now here is the interesting thing: the splash screen for the installon a SP 2 box has a background like a scene from Woodstock. The background on a SP1 box install that says "Zune needs an update" Your version of Windows or Zune software may need an update. Windows Vista support is comiong zoon (It can't tell XP SP1 from Vista?)... Ok the Background picture that honestly looks like.... a young oriental women being raped. Try It I am NOT making this up...

      --
      - Minutus cantorum, minutus balorum, minutus carborata descendum pantorum.
    4. Re:Did they plan on this? by badasscat · · Score: 5, Funny

      What about it? It lost 4 billion dollars and finished a tiny bit ahead of the Gamecube in market share.

      Yeah, MS seems to have perfected the business model of losing billions of dollars and coming in a very distant second.

      The Zune's got the Sansa in its sights!

    5. Re:Did they plan on this? by leonmergen · · Score: 4, Insightful

      The XBox still hasn't gotten it right in terms of market acceptance.

      Maybe that's because there will always be a group of people that simply won't buy an Xbox because it's made by Microsoft ?

      --
      - Leon Mergen
      http://www.solatis.com
    6. Re:Did they plan on this? by Phisbut · · Score: 4, Insightful
      Maybe that's because there will always be a group of people that simply won't buy an Xbox because it's made by Microsoft ?

      Despite what we would like to believe, the group of people who don't buy stuff made by Microsoft is very, very small. They don't make a difference.

      --
      After 3 days without programming, life becomes meaningless
      - The Tao of Programming
    7. Re:Did they plan on this? by mstone · · Score: 4, Insightful

      A loss-leader for what?

      The Xbox makes sense as a loss-leader because the games themselves are a revenue stream worth chasing. But with Apple holding song prices at just-above-breaking-even level, there's no secondary sale for the Zune to loss-lead.

      Apple uses the iTunes store as a value-added proposition for iPod sales, and takes its profit from the hardware sale. The music is a not-quite-loss leader for the device.

      How is Microsoft supposed to carve out a profitable market by selling the hardware at a loss and making just enough on music sales to keep its online store running?

  2. Maybe by eclectro · · Score: 4, Funny

    if it could have squirted ogg, it might have done better.

    --
    Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
    1. Re:Maybe by ZachPruckowski · · Score: 5, Insightful

      Don't kid yourself. It might have sold better in the FOSS-supporting Windows market, but that's not a huge market. The Zune would have been helped by having PlaysForSure compatibility, and Linux/Mac compatibility. Ogg is going to be at best 1% of the market, and it's going to be the 1% least likely to buy anything Microsoft.

  3. Honestly by MiKM · · Score: 5, Insightful

    Did anybody seriously expect the Zune to gain a lot of market share?

  4. Zune has so much promise by Buzz_Litebeer · · Score: 5, Interesting

    Unfortunately the Zune seems to offer very little, and the feature that it should be known for takes a LONG time to implement. Sharing a song with another zune is as easy as the path the pinball takes on the sesame street number song.

    It takes like a minute to share (squirt) a zune song

    http://www.youtube.com/watch?v=jpHzQYKDlWU [youtube.com]

    The thing I was wondering is this. I do not mind the squirting feature, it seems neat and probably could have been implemented in a more intuitive way (IE have a squirt button instead of traversing 3 menus and a submenu) but the idea itself is "ok." Though I do have a problem with "squirting" a song in reference to a player that looks like it was molded in shit.

    So they have some possibilities for cool features! They have wireless... why do they not leverage it in more interesting ways.

    As you can see in the video they can see other zune players, in fact it seems incredibly intuitive.

    Now lets say that it is true wifi and could probably support 5 or 6 streams coming out of it... why do they not have some kind of "Zune broadcast" feature were people can look at zunes, see what they are broadcasting or who they are listening too, and let people tap into the music that way... maybe even have some sort of re-broadcast peer to peer feature were each zune re-broadcasts what it is playing if someone wants to listen to the same song...

    This way if you knew a lot of zune friends you could have them sample the song before you squirt it into their zune... though even talking about the zune and squirting makes me kind of uncomfortable.

    Also, since it has wifi, why do they not provide a program that lets your computer do the same thing... IE submit to someones current audio stream.

    This is even "better" than bringing an ipod to a club and having them plug it in, you just bring your zune in, start your stream and the DJ could link into it. OR you could go to your house, have your computer plugged into a nice sound system, and have it plug into what your zune is playing, this would allow you to use the zune as sort of a music remote control were you have a nice interface in your hand.

    Or it could be used the other way around, the computer could transmit music and the zune could log in and see the music being transmitted... Microsoft even has Media center edition which would be perfect for this kind of thing, or it could be a plug in to their current media player. This way people could come over, log their zunes into your computer network and listen to music rocking down the line.

    Maybe internet radio, walk into a wifi cafe, set up your zune, and listen to radio streaming from a remote radio station that is on-line, NPR for example (though you might want to find one to your tastes ofc).

    How about wireless synchronization with podcasts? Walk into a wifi area and hit "sync" and have it sync with all the podcasts you are behind on and then tell you which ones you haven't listened to yet.

    Maybe they could work with an online video provider similar to youtube and hook up a method to stream user videos to the zune in an easy fashion, something that would nearly be a killer app for anything.

    Imagine a youtube branded mediaplayer with wireless access (maybe even work with phone companies for EVDO support) were someone could log into youtube and download youtube videos right to their phone.

    I mean, the possibilities are ENDLESS and OBVIOUS. You merely have to think "man what would I love to do with a wireless capable player that can be locked into a major brand and legally buy music for" etc... and it seems Microsoft chose one interesting feature to focus on and implement poorly (squirting) and then made it so that the player broke every compatibility rule that you can think of, and made a SONY mistake were it changes format and requires that you re-purchase to play.

    In the end you have to ask yourself "WTF"

    and note, all of this is without the criticism of making blood contracts with record companies etc... it is saying "here are the things you made me hope you would provide, then you provided... this"

    --
    If you don't vote, you don't matter, so don't waste your time telling me your opinion
  5. Seriously. by windex · · Score: 4, Insightful

    The iPod has remained relativley the same across all releases. It still does then what it does now. It still works in generally the same way.

    If Microsoft wants to touch that, they need an interface most people understand and prefer to the iPod, and they need to STICK TO IT. Ease of use and knowing the tricks to an iPod are part of what keeps people buying them again and again. Knowing Microsoft every revision of the hardware will be wildly different from the last, breaking any device-bound loyalty people have.

  6. iPod historical sales figures by amightywind · · Score: 5, Interesting
    How many Windows iPods were sold a few weeks after they hit the market?

    I had every intention of flaming you, but you are right. These sales figures show that it took over a year for iPod to really take off.

    --
    an ill wind that blows no good
    1. Re:iPod historical sales figures by Smallest · · Score: 5, Insightful

      part of that long ramp-up is the simple fact that it took time for people to catch on to the idea of a portable MP3 player - from any manufacturer. Zune doesn't have that particular problem; the market is well-established.

      --
      I have discovered a truly remarkable proof which this margin is too small to contain.
  7. Re:CNN review of the Zune by AKAImBatman · · Score: 4, Funny

    If that review is any indication, I don't think "Zuned" is going to mean what Microsoft wants it to mean. Rather than hearing, "Dude, I just Zuned you a song" you're going to hear, "Dude, CNN just Zuned Microsoft."

    Besides the iPod Shuffle tangent, my favorite part of that video was, "Why don't they get some decent design people to make things look better?" Ouch!

  8. Re:Well... ok by ZachPruckowski · · Score: 4, Interesting

    That's a totally different issue though. Back then, MP3 players were relatively rare. Today, almost everyone has at least played with one (if they don't own one), and there are tens of millions on the streets (in the US alone). Back then, iPod sales were slow because MP3 player sales were slow.

  9. Re:iPod has something to fear by BeerCat · · Score: 4, Interesting

    Microsoft duds - Bob, Windows at Work. Fair enough.

    OTOH, Office succeeded more because it was a bundle for less than the cost of WP plus 1-2-3. Oh, and all components looked the same (thanks to being Windows based), and worked more similarly, so learning one meant that learning another had already started. And there were "extras" (Org Chart and so on). Despite how good technically 1-2-3 V3 and WP5.1 were, they were arcane to learn.

    As for Zune, well it looks as though Microsoft used Taco's review of the iPod and stopped all thought there. No WiFi - well ours has. Smaller than an Archos - well ours is bigger. Lame - well...

    --
    "She's furniture with a pulse"
  10. Merchant Support by DLG · · Score: 5, Informative

    In the simplest terms, the Zune will not be receiving the best response from the merchants who might be pushing it during this holiday season.

    a) These merchants all have 100's of iPod Accessories. The nature of this is that if you sell a 299 dollar IPod, it will also create the sale of some other device, perhaps a speaker system or a nice little protective wallet, or some addon. Even if they would work fine with the Zune, the packaging all says 'iPod'.

    b) No impulse upgrade available. Someone comes in for a 30 gig iPod and may be talked up to a 60. The shuffle buyer ends up with a Nano. Maybe the Nano buyer ends up with a video iPod.

    c) The Zune is a new product from Microsoft. To most vendors that implies support issues. The worst thing for them would be to have to deal with returns. Microsoft waiting till this close to Christmas is probably to try to get enough of these into the market before the inevitable bug/virus/hardware issue comes up. They would prefer to fix it after Christmas to see big numbers.

    d) Grandma buys the Zune for her kid because a salesperson said 'its like the iPod but better!' and the kid returns the Zune for store credit to get their iPod.

    Basicly the profit margin can NOT be high enough to sell this at this stage. The question is WHEN.
    ---

    I will not propose any suggestions of how they could improve things. Clearly the fact that they have a wifi and fm radio in the box and an upgradeable firmware/software means they could improve these gradually. But the fact that they came so strongly with DRM that even makes my recording of my sister's karaoke performance self destruct ala mission impossible, does not bode well to the idea of a flexible portable mobile media center.

    The fact is that Microsoft should be big enough player to dictate to the RIAA how things are going to be rather than the other way around. Even Apple, substantially smaller, bullied them effectively.

    I haven't tried the Zune, but i also didn't buy an iPod until the Nano came out, and since I can fit my Nano in my shirt pocket and forget it is there, I don't see any comparison to Microsoft's offering.

    1. Re:Merchant Support by UnknowingFool · · Score: 4, Informative

      I think 'bullying' is too harsh a term. I do think Apple strong-armed the labels. After all, who else is bigger than Apple in the online music market? But most people agree with Apple on pricing. The whole incident on pricing shows how short a memory the labels have. Their attempts to make money on digital music failed for years. Apple came to the music labels with the idea of iTunes store and successfully implemented it. Their argument for fixed pricing was simple. If you keep the prices simple and low enough, most people will buy music instead of pirating it. The labels allowed it to happen and they made hundreds of millions without any real extra effort on their part. Then they want to raise prices forgetting why iTunes Store was successful in the first place. Or is it that they remember but they're just too greedy?

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
  11. Re:Bah. by killjoy966 · · Score: 5, Funny

    Sure, the Ipod is easy to use, but it is also boring. It's a white box, how innovative is that? And they act like they have made fire.Since when has fire been any more exciting? For starters, it's an incredibly dated technology. It doesn't do anything for me that I can't accomplish with a flashlight or space heater. I mean, sure, it's hot and red (red hot even?) but how innovative is that? And my cavemen neighbors act like they have made sliced bread.

    --

    Sigs are for suckers.

  12. Re:Give it time... by UnknowingFool · · Score: 4, Interesting
    But look what they did with the XBox, Web Servers, and Browser. Microsoft always tends to start slow with a crappy product and take heavy losses.

    Xbox: Anytime a company is willing to take billions in losses to get marketshare, the product should be able to place better than 2nd place to the PS2.

    IIS: Even though it is bundled with Windows Server, it still is second place to Apache.

    IE: Ahem, didn't they get sued by leveraging their monopoly on this one?

    So far none of the examples succeeded on their own merits.

    --
    Well, there's spam egg sausage and spam, that's not got much spam in it.
  13. It's not the hardware, it's Microsoft's approach by hmbcarol · · Score: 4, Interesting

    The Zune hardware is not too bad. Some reviews have actually said it's really pretty good. The problem is that you don't try to take on the market leader with a device that is about as good for the same price. Esp if it's larger, heavier, and has less battery. The biggest "cool factor", the WiFi isn't even remotely useful until there is a critical mass of Zune in the wild. If you want to squirt stuff from your Zune you have to find someone else who has one.

    But it's not flying off the shelves. It's NOT EVEN ON some shelves. It will fall off the Amazon top 100 in the next few days. The iPod is 5 or 6 of the Amazon top ten electronics sellers. The #1 at Amazon has firmly been an iPod for weeks. (Zune was #94 last I checked)

    And Microsoft has done everything right. They were able to convince the entire non-iPod MP3 player industry to adopt Plays-For-Sure so they could all be put out of Microsofts way at once and they STILL can't outsell Creative's player.

    Would you do business with them after they lured you into Plays-For-Sure?

    They were carefull to pay off the RIAA through Universal Music for each Zune sold. The RIAA gets their money when you pay at the cash register. That way people can know they are doing the right thing.

    Everyone who wants to send a buck to the RIAA by buying a Zune raise your hand!

    They did a lot of focus groups and their ads had the right mix of Black, White, Asian, women, men, young, and old in their "Welcome to the Social" ads which feature some kind of music player. Did their ads really inform anybody about the Zune? Why I want one instead of an iPod?

    They carefully came up with a misleading "points" scheme to cloud how much a song costs and to force consumers to leave a few cents on the table for each purchase. This is sure to appeal to the average buyer.

    The only one who deserves a Brown Zune for Christmas is Bill Gates.

  14. Bzz, wrong answer by patio11 · · Score: 4, Insightful

    MP3 players existed before the iPod and they were *commodity hardware* no less. Apple said "Screw that, this is a style item, not a pocket radio", and made the MP3 player *cool*, then charged a couple hundred dollars more than the Asian consumer electronics giants were charging. And proceeded to beat the living who-hah out of them. (The original iPod was $400 back in 2001. The Nomad Jukebox, which also had a hard drive, sold for about $250. Ever heard of it? Me neither. There were dozens of flash-based MP3 players, all capping at $250. Some of the popular models were in the $160 range.)

    See generally http://news.com.com/Apples+iPod+spurs+mixed+reacti ons/2100-1040_3-274821.html for a blast from the past.

    So here is the problem for Zune: there was a "portable MP3 player market". It was tiny. There is still a "portable MP3 player market", and its still tiny. And then there is an iPod market. Apple owns the concept like Nintendo used to own "video game console" (come on, how many of you have mothers who said that the Playstation was "The new Nintendo?").

  15. Re:Ugly by soft_guy · · Score: 4, Informative

    Point me to a version of iTunes without DRM from Apple please.If you use your own CDs and/or plain MP3s with iTunes, there is no DRM. If you use your own CDs with Zune, DRM is added to your files. If you are using non-DRMed MP3s from Creative Commons, this violates the terms of the copyright. If you are using MP3s from your own band, it is a pain in the ass.

    With Apple, you can at least choose not to have DRM by not using the iTMS. And actually you can still use iTMS for Podcasts without any DRM which you can't on Zune.

    --
    Avoid Missing Ball for High Score
  16. Wonder how sales are in Isreal... by nobodynoone · · Score: 4, Funny

    Considering that the name "Zune" translates to "FUCK" in Hebrew... Not joking. http://herenot.livejournal.com/29371.html

  17. The reason by SuperKendall · · Score: 4, Insightful

    The reason Apple impresses us all is that they make devices so nice to use, that even people that claim to hate them buy them. You own one after all...

    Also that the devices tend to have a lot of technical depth but hide it behind a refined interface - poke around for alternate iPod management software if you want to have more control over what happens. They have moved beyond the "Cool, I can add my own graphics" that a lot of us loved at one time and have moved into the "thank god I don't have to mess with it to use it fully'.

    It's like the recent story about the Microsoft shutdown menu. Like you, they thought more choices were better but really they are not. Apple is very good at folding choices into as few choices as possible.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  18. Zune is NOT a product by gelfling · · Score: 4, Insightful

    Once again, Zune is NOT a product. Zune is a massive testbed for DRM that MS is examining at the behest of the music industry for subsequent inclusion in Vista.