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Why Microsoft's Zune is Still Failing
DECS writes "Last winter, RDM detailed why Microsoft's iPod Killer would fail miserably. This year, the site argues, Microsoft will fail again, but for a new set of reasons. It is not obvious that the company has figured this out itself. 'Microsoft doesn't seem to learn from its mistakes in consumer electronics very well. When it does however, it frequently gets the timing wrong. This year, Microsoft appears set to compete against the Apple of 2006. It now offers two flash models, last year's leftover 30 GB unit, and new 80 GB version. The problem is that Apple moved the goalpost dramatically. Apple's new 3G Nano is ultra thin and small, but delivers the same video resolution as Microsoft's boxy flash Zunes at the same price. It also plays games.'"
If it was anybody but Microsoft, maybe. The problem with MSFT positioning itself as an anti-anything is that nobody thinks "I'm a loner. A rebel. And Microsoft is building the product to help me let the world know it."
Anyway, they couldn't done it, IMO. There's a saying attributed to Ford Motor Company that says, "Culture eats strategy for breakfast." I used to work at Microsoft, and Microsoft's culture eats everything for breakfast. When they acquired my former employer, the first thing they did was wipe out our culture, and our culture was a lot of what helped us to make a product good enough to make Microsoft want us.
I left after a year and a half and know work for another company that was recently acquired. Our new parent wants to preserve our culture no matter what, so that we keep making the great product that made them want to buy us. What a night and day difference.
It is pretty impressive at first blush, but without real numbers its hard to gauge. Especially considering ipods occupy 13 of the 25 products listed, including #2,3,4,5,8,11,12,14,15,16,18,19,20. Zunes have 4 in the top 25, including: 1,10,24 and 25.
From 25 - 50, there are 2 more Zunes, and 8 more iPod model, From 51-100 - 5 zunes and 7 ipods.
That the -brown- zune is the most popular product could well be pretty meaningless, as well as a reflection of the blowout pricing. The black and red versions ranked FAR lower, and I find it impossible to imagine that brown is what everybody wants.
The point is: there are 14 zunes in the top HUNDRED, while there are 13 ipods in the top TWENTY. (and 28 in the top 100).
If the brown zune at blowout pricing can grab the #1 spot, yeah that's impressive, but really doesn't say THAT much. Looking at the numbers its clear that ipod still utterly dominates. If only we had the numbers so we could add up total zunes and total ipods then we'd know by how much.
Its also clear the ipod is far more profitable, considering the lock they have on positions 2,3,4,5,and 8 all at pretty much regular full retail, and especially considering the number 3 spot is held by the 16GB ipod touch which is their flagship product and runs more than twice the price of the zune.
Also, ipod, by having twice as many sku's roughly cuts its sales scores in half, because sales are divided by that many more products. I suspect that if ipods weren't available in quite the same rainbow of options as they are, they'd handily lock up the top 5 to 10 spots no matter what Microsoft did.
-cheers