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Heavily Discounted Zune Outpacing iPod Sales
firegate writes "Yahoo Tech is reporting that the Microsoft Zune, having been heavily discounted for the holiday season, 'is currently Amazon's top-selling music player, beating out the new iPod Nano and the 80GB iPod on the 'Bestsellers in Electronics' list.' An Associated Press report even indicates that the Zune's newfound popularity has left it in short supply, sold out in many locations. Is this a sign that a true competitor, from Microsoft no less, has finally broken into the Apple-dominated MP3 player market? And will this spell more success for Windows-media based music subscription services like Napster?"
story is complete bull. go check amazon, as of today, 1:30 EST, apple mp3 players are at places 1,2,4,5,6,7,8. the zune is number 9. (apple continues at places 11, 12, 13, 18 ...)
http://www.amazon.com/gp/bestsellers/electronics/172630/ref=pd_ts_e_nav
Heavily Discounted
I suppose it depends on when you look at the numbers as Amazon gives discrete periods of time when items are selling vs. others. For instance, looking at it now, the Zune is #8, well behind 7 flavors of iPods...
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Will Microsoft be able to sell it through another outlet? What will be done with all the Generation One Zunes still on shelves? What percentage of these Gen 2 Zunes are being purchased by hapless parents who will see them returned by ungrateful children?
For the answer to this and many more questions, wait for December 26!
As of MY press time, Zune 80 is #9. iPods occupy spots 1,2, and 4-8. #3 is a Sansa of some variety, #9 is a Zune, and #10 is another Sansa. 11-14 are different nano varieties, and all the way at #15 is a Zune spot.
Feel free to come up with your own crackpot theory as to why this is. My favorite is the Zune isn't popular unless it's dirt cheap.
Don't post articles on what is or isn't on amazons bestseller list. Because as soon as you do this, amazon will prove you wrong.
How would this spell success for Windows-media based subscription services, since the Zune doesn't support PlaysForSure?
I think that sort of thing is called "predatory pricing": pricing something below cost in order to drive a competitor out of business. It's frowned upon in a free market, in particular when a company uses one monopoly to support predatory pricing in a different market.
Of course, given that Apple itself dominates the MP3 player market so much, I'm not sure whether to laugh or cry...
Granddaughter: I want an iPod for Christmas!
Grandmother: Okay, honey!
Later that day, grandmother has a sudden attack of sticker shock at the price of the iPod and asks if there's something "like it" for cheaper. The clerk, with a "someone's going to be disappointed this Christmas" smirk on his face, hands her a heavily discounted Zune. The grandmother, not knowing any better, purchases said Zune.
Come Christmas morning, the granddaughter rushes to the Christmas tree to find the box containing her brand new iPod. Upon ripping off the wrapping paper, she realizes... she got a Zune.
At this point, she has two choices: demand a return for an iPod (usually out the question, since insulting grandmother may cut off any future birthday cash) or she'll feign excitement (a skill nearly all women are born with) and start secretly plotting to kill her grandmother.
Moral of the story: if you're a grandparent and you don't want to die at the hands of your sweet, loving granddaughter... don't buy a Zune!
"The fight for freedom has only just begun." - Geert Wilders
They can't keep selling it at a loss and hope to eventually make a profit, since Microsoft's online music store isn't as comprehensive as iTunes.
I'm apparently confused. I was under the apparent misconception that both units played MP3s and neither required a music store to operate the device. Silly me -- all this time I thought you could use any MP3 on these devices. Don't know where I got that from.
Aside from your comment about the music store, from what I've seen of the Zune (I don't own either an iPod or a Zune) it works just fine for a media player. Yeah, the color schemes are lame and they certainly don't have the marketing team that Apple does for their units, but money talks.
As long as it plays music and fit in your pocket, cheap people (who happen to outnumber those interested in being hip) will flock to it. In addition, for you to claim that MSFT will somehow not be able to continue this mode of operation for a very long time, you're nuts.
At the moment, Apple has 7 od the top 8 spots on Amazon's MP3 bestseller list, including their 4 gig Nano at #1. The 2nd-gen 80-gig Zune comes in an #9. However, you'll note that the Yahoo article's a week and half old.
"In a 32-bit world, you're a 2-bit user. You've got your own newsgroup, alt.total.loser." -Weird Al
iTunes/iPods have done this for a long long time. You can even subscribe to video podcasts if you have an ipod capable of playing it.
Aside from your comment about the music store, from what I've seen of the Zune (I don't own either an iPod or a Zune) it works just fine for a media player. Yeah, the color schemes are lame and they certainly don't have the marketing team that Apple does for their units, but money talks.
I have this sneaking suspicion that there will be a lot of forced smiles and strained "Thanks, Mom"s come Christmas morning.
Followed by a spike in iPod sales the following week.
One man's -1 Flamebait is another man's +5 Funny.
"Rate of Growth" is one of the most commonly "spun" statistics.
For example: If I sell 1 widget last month, and then I sell 10 widgets this month I can make the claim that I have a 1000% month-over-month growth rate. Not only that, I have a "faster rate of growth" than every other major widget manufacturer/retailer.
Obviously, rate of growth is clearly only a meaningful statistic when presented alongside comparative volumes.
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They could give it away for free to everybody who runs windows and it would not effect their bottom line. In fact, they could give one to everybody (I would guess that they would not give it to google or Linux users). At that point, how many music companies would NOT sell through MS?
I prefer the "u" in honour as it seems to be missing these days.
Unfortunately for them, there is no way to recoup money on the loss leader Zune as there is on the X Box (i.e. games sales and subscription play services).
This isn't the first time though, that Microsoft has gone with a one-size-fits-all strategy.
It won't be the last either.
Some days it's just not worth
chewing through my restraints.
There's an old salesman's saying:
It takes no particular talent to sell a dollar for fifty cents.
Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
Most retailers will comp competitors ads. We managed to get rid of our stock of brown zunes (all we had left of the gen 1s) last friday because toys R us had them (specifically the turd brown one) advertised for $79. Hanvt sold any other zunes since then that i know of. Plenty of nanos and 80gb classics tho. The microsoft rep was in the other day to check our displays, clean the 360 display or something, i almost laughed in his face. Woman came up and asked if we had any Wiis, i told her no, we got our shipment of 10 for the week earlier that day and they had sold out in less than 2 hours. He overhears my side of the conversation and is like "What sold out? zunes?".
"Sic Semper Tyrannosaurus Rex."
Except they can't legally do that, unless they plan on always selling zunes at a loss, they would be in violation of antitrust legislation if they used an artificially low price to cut into the competition before raising the price again. They could do it and leave the price low, but if Apple isn't doing so well with the ITMS in comparison to the ipod sales, I can't imagine that MS would do well enough to turn a profit like that.
That being said, with the amount of mark up on ipods, I would be surprised if the zune isn't still selling for a profit.
Personally I'm somewhat skeptical as to how long this is going to last, but even if it doesn't last for too long, it gives the zune more exposure and the ipod owners a sense that maybe ipods really are as over priced as people say.
The main point of this is to get zunes sold so that they can get a proper word of mouth campaign going. Contrary to popular belief the zunes aren't bad, while unpopular, the only person I know that owns one was quite happy with it last time I saw her. After talking to her I probably would have bought one, had I been in the market for a new mp3 player.
Amazon Sales Rank in no way represents reality. Just last week many members the HD-DVD rah-rah camp prematurely declared victory for software sales based on Amazon rankings showing HD-DVD titles outselling Blu-Ray by a large margin. In reality Nielsen VideoScan came back to show Blu-Ray taking the week 73:27.
For the entire month of July the PS3 was in the top three of the Video Game category at Amazon, seemingly outselling even the Wii most of the month. The Xbox 360 was barely in the top 20 for the month. When the smoke cleared the Wii outsold the PS3 by over 300% and the 360 beat it by 11k units.
Amazon Sales Rank is useless for comparing product sales.
...Microsoft's online music store isn't as comprehensive as iTunes.
Not only that, but putting the music on the zune isn't as easy a task as setting up iTunes. I have a first-gen zune (brown, no less) and it took me over an hour to get the software installed and get ready to use the zune. Also, I got the zune second-hand and once I set up my software, I wasn't able to play any of the music that was left on it. It kept saying that I didn't have permission. When I asked the guy who I got it from about that, he said that they were mp3'd using the zune's software, so he didn't know why that was the case... they shouldn't have been DRM'd.
I don't know if the new zunes fixed that or if the new zunes have a better interface on the device itself (I do know they haven't really gotten the desktop application any simpler. it's still a pain to use). The old zune is a pain in the arse to navigate and the only thing I really feel it has going for it is the larger screen, although I haven't put any video on it, yet.
so, has anyone used one of the new zunes, yet? has MS improved the interface? The physical box definitely is much nicer looking than the original model and, from a purely superficial standpoint looks like it can compete with the ipods... at least with the general consumer population.
...spike
Ewwwwww, coconut...
I wonder how many billions Microsoft plans to lose on this turkey? Billions lost over the life span of WindowsCE has purchased them a strong hold of the PDA market but is giving them problems in the SmartPhone market with Nokia's Symbian and Linux stalling that effort.
Anyways, it isn't a surprise that Microsoft is dumping billions into this product and suckers are picking it up. It's not like they don't have the cash to dump on this and we all know there are millions of suckers willing to pick up a Microsoft product because it's cheap.
The only thing of interest here is how many billions Microsoft is willing to lose to gain market share against Apple. They've crossed over the $10 billion mark to kill Palm about 4 years ago. But it's a laugh when the press talks about WinCE, PocketPC, Windows Moble, etc being a good product line for Microsoft. So if you're a MSFT investor, Zune will be a massive loser too. IMO.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
they would be in violation of antitrust legislation if they used an artificially low price to cut into the competition
At which point the Justice Department would swoop in and beg Microsoft for a spanking, I'm sure.
I always mod up spelling trolls.
I have three iPods, and a Zune 30 (with the new firmware). The new Zune does not suck *at all*, and the wireless sync works quite well. The Zune button is not nearly as good as the click-wheel, though. But the iTMS, and the Zune Marketplace are comparable. iTunes still has better podcast support (includes password protected podcasts), but the Zune has a useful Zunepass subsciption service. And honestly, I'm surprised at how I kinda prefer the Zune points system. There's a certain degree of convenience there that I like.
Zune is for real, and anyone who would be disappointed to get one would only be disappointed because it's not what Muffy has.
The 2006 Zune was intended to be sold for $300, but Apple's price cuts last year forced Microsoft to sell it at $250. Even at that price, it couldn't sell.
By June 2007, Microsoft had stuffed the channel with 1.2 million units. Retailers have been trying to sell them ever since, as low as $80. The fact that last years models, which Microsoft has already claimed having sold, are being sold at fire sale prices of a half to a quarter of the original price indicate that Microsoft hasn't made any profit on the Zune hardware.
Last year, the speculation was that Microsoft would give away hardware with a rental subscription. So the OP is pointing out that no, the hardware itself is a huge failure, and rentals (or sales) can't even bring those losses into the black. Microsoft can't make any money on downloads. Even Apple didn't make money on downloads until it was selling millions of downloads per week.
The idea that Microsoft backers would parade out the line that "the Zune 30 is outselling the iPod at certain retailers!!!" was predicted last week in:
Why Microsoft's Zune is Still Failing
Last winter, I detailed why Microsoft's iPod Killer would fail miserably. This year, Microsoft will fail again, but for a new set of reasons. It is not obvious that the company has figured this out itself. Here's why the Zune will fail in 2007, and how Microsoft is painting a fraudulent portrait of interest that doesn't exist.
Your friends must be illiterate as iTunes asks if you want to resync your library with the one of the new computer. You can tell it not to and it will be in manual song management mode. From there you can drop all of the songs you want onto the iPod. It's not rocket surgery.
I'm a loner Dottie, a Rebel.
"It's not rocket surgery."
I'm going to have to steal that line.
Wrong. Anti-trust involves using your market dominance to destroy competition in other markets, not just having done so in the past. If the US wanted open markets, it could have stopped Microsoft before it destroyed markets, rather than just spending millions to establish the facts and then doing nothing long afterward.
However, Microsoft has already failed to use its market dominance to get PlaysForSure off the ground, and sure doesn't seem to be doing a bang up job with the Zune. If th company started dumping the Zune in other markets, you could be sure Sony and others would attack the company using local laws. That's unlikely, as Microsoft has no significant hardware sales outside the US.
Apple doesn't have much to fear in the US from the Zune, as Microsoft can't manage to even sell the Xbox at a profit in volumes around 5 million per year. Apple sells ten times that many iPods, and the number is only going up. Sure some of those iPods are $200, but around a third are $400, and the iPod will add another 10 million per year. Compare Microsoft's greatest hardware "success" to Apple's similarly priced iPod business, and it is clear Microsoft has no hardware position to leverage. The Windows monopoly isn't selling the Zune or the Xbox.
In media sales, Apple is at the top of music, TV, and movie sales--despite the fact that it hasn't even started offering rental movies or HD content. It's still #1 in each segment, with 60-90% of those markets. Microsoft doesn't place among the top four outfits that sell 97% of content downloads, even when combining its incompatible Zune and Xbox media sales.
Microsoft doesn't have any position to leverage. It can't make hardware that works, can't sell it at a profit, can't sell downloads, and still seems to think rental music will somehow take off after ten years of failure in the market. On top of that, it has lost its leadership position in desktop operating systems, lost its effort to monopolize server operating systems, and can't make money in any new markets, including search.
So on one hand, you're wrong about anti-competitive markets, but on the other hand, it doesn't matter because Microsoft is on the way to oblivion. Its 90s crown isn't going to be any good in a world where OEM PC licensing is increasingly not the primary way to make money and wield influence. That weird period of tech history is on the wane, and a new era of open competition will leave Microsoft's fiefdom as obsolete as Windows.
Ten Myths of Leopard: 10 Leopard is a Vista Knockoff!
These stats have little meaning for one giant (I would think obvious) reason -- people don't buy their iPods from Amazon. I bet 90% of iPods are sold at either apple.com or Apple stores. Zunes are sold 3rd party.
1. Kindle. (ok, Amazon, I admit it. I'm impressed.)
2. Canon Powershot A57OIS
3. Apple 4 GB iPod nano silver
4. Garmin nüvi GPS navigator
5. Canon PowerShot A560
6. Apple 8 GB iPod nano black
and so on... iPod classic pops up again at #11, iPod Touch at #18 and 21... Zune comes in at #24. WTF? Likewise, if you head over to bestsellers in the "MP3 player" category, you'll see Apple in the #1,2,3, and the 5,6,7,8,10 spots. #4? SanDisk. #9? #9 is the much-vaunted, reduced-price Zune... What's up? I think that Microsoft is playing one of the oldest tricks in the book, using the "in it's class" qualifier. For instance, you are told that the 2008 Chevrolet Pendejo is the cheapest, best-performing, and bestselling SUV "in it's class." What the ad does not tell you is that the class they're talking about is narrowly defined as the class of SUVs which get 5 miles per gallon, which can't exceed 45mph when going uphill, and which tend to spontaneously combust when making left turns. Tack on enough qualifiers, and ANY piece of crap is the best in it's class. Microsoft has it's Zune classed as a "portable digital media player". Apparently, iPods aren't Portable Digital Media Players, they're MP3 players, and there's some sort of really important difference, so the Zune wins the top slot... in it's class. Maybe I'm missing something obvious, but from what I can tell, this is some sort of scam cooked up by the guys in Microsoft's marketing division. Wow... I mean, I feel I should be pissed at Microsoft, but it's just kind of, well... pathetic.
References:
http://www.amazon.com/gp/bestsellers/electronics/16009311/ref=pd_ts_pg_1?ie=UTF8&pg=1 http://www.amazon.com/gp/bestsellers/electronics/ref=pd_ts_e_bcrm_electronics http://www.amazon.com/gp/bestsellers/electronics/172630/ref=pd_ts_e_bcrm_172630
Try refining your results a bit, perhaps looking at "MP3 Players" (which iPods do indeed dominate), but then selecting the subsection "Hard-Drive Based". Here, Zune takes spots 1,2, and 4 (Brown, Black and White, respectively), iPod gets space 3, and the Zen is 5th.
Obviously this is some sort of evil plot by Microsoft.
Also you might try looking lower in the "Portable Digital Media Player" bestseller list: iPods are there, just very low on the list.
You'll get banned from Slashdot for doing things like that, you know. This site is for prejudice and uninformed drivel only; Uncovering the real scam is bad form.
It amused me particularly because I asked someone only today why JVC sell over 200 different current models of camcorders in the UK, and was told that it was because of the scam shops do which says 'if you can find one of these cheaper anywhere else we'll refund the difference...' - apparently each major reseller gets one model which only they sell, even though it's practically identical to all the other models which are exclusive to each of the other major retailers. This scam of Microsoft's seems to me to be a sort of variant of the same gag.
Caveat emptor.
I'm old enough to remember when discussions on Slashdot were well informed.
I'd bet money that many kids getting a Zune for Christmas will think "well damn, why couldn't it have been an iPod?". Happens all the time...kids want one thing, parents buy what they can actually afford that comes close.
Although holiday sales give you a sign of how much revenue a company is pulling in, this is the *least* representative time in terms of what product is actually *desired*. Who's doing the buying? Not the people using the stuff!
Come back in January, see how many Zunes are returned. Or hell, look at sales in the middle of March or some other random time. Either of those would be more accurate indicators of whether or not the Zune is really hurting the iPod market.
"Microsoft killed my company, I hold a personal grudge. I don't use Microsoft products and neither should you."-JWZ
If you give it away,
they will come.
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Nerds do NOT exercise. Get out of here, nerd card revoked.
What's worse, it was my girlfriend that started me running!
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"Also you might try looking lower in the "Portable Digital Media Player" bestseller list: iPods are there, just very low on the list."
This was debunked months ago...There are no current generation iPods on the list. For some reason Amazon is not counting current generation iPods as a portable media player.
The folks who follow Amazon Sales Rank over time know that the Sales Rank tends to fluctuate and one needs to look at them over a period of time to draw any meaningful conclusion. The chart at http://charteo.us/amzn/compare/B000JLKIHA,B000H0QDCC/ looks at the Sales Rank chart for Apple 80 GB iPod Classic (Black) and Microsoft Zune 30GB Digital Media Player (Black) over last 3 months. Yes, the chart is live and compares Sales Rank for last three months from whenever you at it. The chart does show a spike in sales of Microsoft Zune during Oct.-Nov.'07 time frame, but then it levels off. In contrast, Apple iPod sales have been steady and better than its competitor for most of the time. The bump in Sales Rank of Zune could have been due to heavy discounts or special promotion campaign or both.
There is another factor to consider -- both Apple iPod and Microsoft Zune are available in different models and different colors, and each one gets its own Sales Rank. So comparing Sales Rank by picking a single model, even over a period of time, is misleading. As Sales Ranks are not additive, you can't simply add Sales Ranks of various models (or combine them in some interesting way, though this may be possible with some advanced math) to arrive at a single statistic.
I do a bit more analysis od Sales Rank charts of different iPod and Zune models in my blog post at http://charteo.us/The-Myth-of-Microsoft-Zune-Beating-Apple-iPod-as-Holiday-Gift-Item/.
The Zune does take spots 1, 2, and 4. However, the most recent generation of iPods is conspicuously absent...the iPod in space three is the previous generation. Where is the iPod Classic? So the Zune is getting spots 1, 2, and 4 on that specific page because there is a lack of current generation iPods. The same is true of the PDMP bestseller list: the iPods listed are the previous generation. If you notice on the first screen you get to navigating from Amazon's homepage to the MP3 & Media Players, the iPods are their own category. The conspicuous lack of any current generation iPods showing up in any of the 3 subcategories of MP3 (flash-based, hard drive-based and PDMPs) may be because Amazon has listed them as iPods, and not as flash-based etc.
Also, how many people do you think get their iPods from Apple vs. Amazon? Does Microsoft even sell the Zune directly (answer: no)? So regarding on the sales from Amazon is kinda ludicrous...
Regardless of Microsoft's involvement of it, anyone using these data to claim that the Zune is outpacing the iPod sales has had their reality cable become unplugged...
It has been a nervous year, with people beginning to feel like Christian Scientists with appendicitis.