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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.'"
Lets see, they are selling lots of them, and slowly gaining market penetration. I don't see that as a 'failure'.
---- Booth was a patriot ----
In the Black Friday sales papers, first-gen Zunes are going for $80-100.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
http://www.amazon.com/gp/bestsellers/electronics/172630/ Zune has occupied the top spot for quite some time. Is this a failure?
We need to have a law or something, that declares everything made by apple as THE only way of doing things, and also forbid other companies from making similar products. I mean, why do they even try? Apple is by far the best and when someone else tries, they're actually wasting valuable resources (plastic, electricity, and even silicon!).
So, Microsoft, and everyone else: please, stop trying. Apple has the only music player worth anything. You have no chance.
(If you don't see the sarcasm tags, then you're probably on a Mac)
Exhibit A: Cute, functional, the industry standard. Everyone knows what it is. Comes in gift-friendly colors. A status symbol.
Exhibit B: Volvo-esque, crippled, and ignored by accessory manufacturers. No one outside Slashdot and the Black Friday Loss Leader Bin has heard of it. Comes in brown. Also a status symbol (but of an undesirable status).
Don't try to overthink it.
Dewey, what part of this looks like authorities should be involved?
Zune (and any like product) will succeed when judged on its own merits, rather being competitor of brand A. But it will never be like that, since Zune *was* positioned as iPod killer from the start.
And yet another thing: I think, psychologically, just like myself, every time you hear of xyz-killer from Microsoft, somehow you end up visualizing Balmer throwing the chair, and then somehow you end up *not* purchasing Zune.
Moved them and made them smaller. Try getting a chair between them now.
Zune shortcomings aside, just look at RoughlyDrafted's other articles. All pro-Apple. Is it a surprise that this guy claims that the Zune is a failure? Personally, the fact that Microsoft don't even try to compete outside the USA speaks volumes about their confidence at this point.
I think it is axiomatic that if your buyer/user and customer are not the same person, then you are in trouble. In Microsoft's case, without hardware sales there will be no advertisements or add sales either, and since they're selling the zunes at a loss, they lose on all counts.
It is a culture thing that causes Microsoft to fail over and over again in the consumer media/entertainment markets.
Although the Zune failure looks time compared to the Xbox fiasco in some ways the Xbox marketplace disaster has moderated the Zune marketplace failure. The Xbox project is now some six years into its life and the console has wasted some seven billion dollars and is dead in the water. The new Xbox 360 after two years on the market is still dead in both Japan and Europe and selling to a fairly niche hardcore US fps/pc gamer demographic. After all those billions the 360 is on track to just making the same 24 million or so worldwide installed base numbers as the first Xbox mess.
The Zune was supposed to be subsidized by the 360 'profits' LOL
Instead of sitting down and hiring really good industrial and UI experts and coming up with something comparable to the iPod line Microsoft has been unable to get out of their same old product strategies:
* Using other products to subsidize new ones to force their products out into the marketplace
* Stupid viral marketing tactics
* Buying off media
* Hiring people to sit around on messageboards hyping their products and slamming their competitors
* Inane attempts at coming up with 'fastest ever' or other silly PR claims
It's a culture thing. People from Microsoft would rather slash your tires or tie your shoe laces together than legitimately win a race and then sit around high fiving each other afterwards over drinks at the local Rendmond wateringhole. Someone up in Redmond needs to wake up and realize that culture is getting them nowhere in the console and digital media markets.
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.
Joel spotted the real difference between iPod and Zune:
http://www.joelonsoftware.com/items/2007/10/05.html
No sig today...
All "golden ear" discussions aside... In case you've been living under a rock, Apple has an 160GB player. The only PMPs with more storage use 2.5" notebook drives and are about four times as large as an iPod. iPods have supported lossless audio for years, which is uncommon among popular media players.
If you happen to like another player that's fine - but don't spout BS. As a wise man once said, it is better to keep your mouth shut and be thought a fool that to open it and remove all doubt.
How can I believe you when you tell me what I don't want to hear?
MS is about as nimble as a beached whale carcass. I'm impressed that they're only a year behind.
MS has a long record of not caring what users want, instead assuming that the public will gleefully accept whatever MS produces. They think they can win at consumer electronics by playing like the monopoly in a market they just entered and have no chance to control, even if they played smart by carving a niche for themselves instead of assuming the market will shift according to their will simply because they enter it.
I thought it was because the logo, when viewed in a mirror, looks like 'anus'
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
Yep.
And when you've figured out why they do something so silly you'll have cracked the problem.
No sig today...
Microsoft's marketing campaign:
You can "squirt" your music at your friends and they'll be able to listen to it a maximum of three times before deciding to pay for a legal copy.
Yeah, dude! Can't wait to get me one of those!
No sig today...
What you say has a lot of truth behind it. Unfortunately, Microsoft can see the writing on the wall for their current software products. Their OS market share has reached saturation, attempts to persuade people to dump their current Windows for the flashy new one are becoming less and less successful. The end of the road for their office products is similarly in view. The trick of adding new bells and whistles and forcing upgrades with a format change has been used once too many times.
They are desperately looking around to diversify, to enter new markets with new products to build up new revenue streams before the Windows/Office cow dies.
They have tried to break into so many different product areas and markets that its almost funny. None of the attempts have been a great success.
They tried to change the rules of the game and make customers subscribe to software if they couldn't re-sell the same thing with new bells and whistles. That pissed off customers to the point where they bit the bullet and started looking at the alternatives, and what a move to Linix might really entail.
They tried to become the owner of the gateway to multi-media distribution. They went as far as building a whole new OS to support this attempt, and bludgeoned a lot of hardware manufacturers into producing HW to support it. They actually sold the idea to a few media creators, and those that bit are finding that the only thing they really bought was yet another way to alienate their own customers.
Consumer hardware is just another branch they are trying. Unfortunately, like Sony they are letting their various product branches force requirements on others. It makes for a nice consistent story, and the different different branches reinforce each other -- but at the price of producing products that consumers just don't want because of the broken aspects in there simply to support restrictions that some other branch of the company wants to see.
Microsoft should by Sony. Their two brain-dead executive managements seem to have a lot in common.
Well, OK, maybe apple sort of dominates the ipod market .. big deal.
.. it DOES NOT affect things like access to government documents and services, access to internet content, access to electronic lodgement of tax returns.
.. but we do cast serious ire on the MS monopoly, not because we are fanbois of the alternatives, but because the abusive MS monopoly is a dangerous thing that drags down on so many aspects of our modern society.
MP3 players are NOT a critical component of the infrastructure of modern society. No matter how successful Apple is in dominating the ipod market
Your tax dollars are not voraciously consumed by Apple license fees because politicians promise "An MP3 player for every school child !!".
Apple does NOT receive licensing income from the sale of competing non-apple-ipod MP3 players, just in case those non-apple units are used to 'pirate' ipod toons.
Job adverts do not require submissions in "Apple iPod format", nor do the majority of jobs available today "require" experience with stated versions of licensed Apple ipod releases.
Worst of all - the world is NOT full of semi incompetent "professionals" working towards building critical multi-million dollar infrastructures for the future, who are incompetant because their only exposure to how things fit together is from what they learned on their ipod.
Its really not the same thing. There are plenty of benign and inneffectual monopolies around
Monopolies on - food, water, electricity, oil, computers, transport, comunications, weapons, healthcare, legal services, education, etc can be potentially disastrous.
Monopolies on portable music players though ? Thats about as bad as a monopoly on ice cream. Lucrative maybe, but its not the end of the world by any stretch of the imagination. You are not exactly cut off from society if you refuse to buy into Apple's iPod dominance.
If "the bottom line is that there are lots of inaccuracies," why don't you point any out? It's easy to dismissively ignore the facts and stuff words into TFA that don't exist, but if you are an expert, why can't you present anything substantial that was not correct in the article?
Channel stuffing was never brought up about NPD's retail sales because "channel stuffing" is stuffing the channel, not selling through retailers. Stuffing the channel was obvious because Microsoft was "meeting its goals" just in time with huge shipments, but retail sales (such as reported by NPD) weren't reflecting those same shipment volumes. The chart in TFA makes it very clear that Xbox 360s were stuffed dramatically in time to meet goals, not demand.
Stores have been sitting on piles of 360s over the last year. That's why Microsoft dropped its June 2007 cumulative shipment goal from 15 million to 12 M and then only shipped 11.5 M. Since June, new shipments have been very small--the channel is stuffed to the gills! Additionally, Xbox Live subscriptions (which come with new units as a free trial) are only around half the units shipped. Are there that many people who buy a 360 and then don't use the free Live membership? Or are those unused subscriptions just sitting in unopened boxes at retailers?
The number and popularity of games available for the 360 and PS3 also don't reflect the idea that there are only 1/2 the number of PS3 players, despite the year head start Microsoft had. Microsoft also has anemic sales outside of the US with the 360, and isn't even attempting to sell the Zune overseas.
Microsoft can plan on ten year profits, but that didn't work out with WinCE, which has been a flightless bird since 1998 and has been left behind by the rapid ascent of the iPhone in its first few months.
Would all the theorists who think Microsoft should be granted a quiet, uncritical ten year waiting period to see whether their products can survive in the market please take a look at the iPhone? It went from announcement to available product in 6 months, and instantly became the hottest selling mobile. It now has 27% of a contentious market, despite being a luxury, premium priced product competing against simpler and apparently cheaper (when subsidized with more expensive contracts) Windows Mobile phones. It sounds a bit like pundits insisting that President Bush's actions should not be criticized until ten years out, at which time he will somehow look like a competent statesman.
There is no reason to believe that ten years will help the Zune, and no examples of any dinosaur needing ten years to take over a market. Microsoft took the graphical desktop market from Apple between 1990-1995, not by slowly taking Mac sales, but by expanding a larger market outside of Apple in the DOS PC market. It isn't doing anything similar here. Microsoft rapidly took the browser market from Netscape within a couple years 1996-1997.
Microsoft also talked about how PlaysForSure would rapidly take the iPod. It didn't. It started over with an incompatible version of the same technology, starting the clock back at zero while also competing against existing PlaysForSure devices.
How is it that "3% doesn't even matter" Apple rapidly earned a significant share in smartphones (27% in the US in its first quarter) on its first try, while monopolist Microsoft can't be expected to take more than a shred of a very specific market for "MP3 players using a hard drive"? Also note that if you reserve the right to define your own market, Apple has 100% worldwide market share for "mobile phones with more than 2GB of RAM."
iPhone Grabs 27% of US Smartphone Market
iTunes doesn't work with anything other than an iPod... but Windows Media Player will work with ANY device (except an iPod, of course, because Apple decided to cripple it in order to maintain their monopoly). Or I can use WinAmp. Or some other player, so long as it's not from the Apple monopoly.
Microsoft: because it's all about choice. Freedom, and choice. Ahhhh, you're blind. Microsoft is just as much after lock-in as Apple. Forget the past and present anti-trust problems that plague Microsoft... They support a multitude of devices not "because [Microsoft]s all about choice" (to quote you), but rather, they do it because their business model is just different than Apple's. Microsoft decided early on that it'd be better to let dozens of manufacturers fight over the music hardware market, and dozens of online retailers/labels fight over the music sales pie while controlling both markets from behind the scene. It was a good plan, but Apple destroyed it by sucking up nearly all of the market with a non-Microsoft system.
Instead of competing with retailers and manufacturers, Microsoft morphed Windows Media into a framework for them to license and use. You see, all the retailers would need a DRM scheme to effectively sell their music. This would then force all the device makers to choose some DRMs to support and effectively segment the market (market = money). DRM systems are complex to implement and require trust by both consumers and labels. With Windows being ubiquitous on Desktops worldwide, MS was positioned from the start to CONTROL the music/video market through Windows [Media Framework]. WMP supports WMA/V DRM, and since its present on 95% of computers in the world, device makers and retailers almost have to use it to hope to compete with the iTunes lock in.
Microsoft charges device manufacturers and retailers a licensing fee for each and every unit of WMA/V enabled product they ship. The rates are negotiated for each company of course, but are likely higher than the "suggested" sample rates on the Microsoft website. Using the sample rate, a company that offered 2 WMA enabled portable music players could pay $1,600,000 to Microsoft in fee's each year. On top of that, your device has to be "approved" by MS. This means it can't use open source software (even open source decoders or operating systems) and basically makes you pay to be Microsoft's bitch.
Now, after reading the preceding, do you still believe Microsoft is all about choice?? Perhaps you've drank too much corporate cool-aid? Microsoft designed their model around lock in too... it's just more subtle than Apple's model... and it's not even close to as profitable, hence the Zune! MS has now gone into the hardware space itself (a strange move for them considering how they've handled cell phones/Windows Mobile) in an attempt to get closer to an Apple-style lock-in model.
References:
http://www.microsoft.com/windows/windowsmedia/licensing/agreements.aspx
http://download.microsoft.com/download/d/0/1/d01ec2b5-a42f-4cef-ae27-123c02515fc7/WMDRM10_FinalProduct_v3-20-2006_Sample.pdf
http://gizmodo.com/gadgets/portable-media/zune-on-linux-done-kinda-219657.php
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