Microsoft faces tough issues vs. Apple’s potent iPod+iTunes combo

“Microsoft will launch its long-awaited internet music store on Thursday, seen as crucial to the software giant’s efforts to establish itself as a force in the nascent digital media market,” Scott Morrison and Richard Waters report for The Financial Times. “Microsoft’s store is modelled on Apple Computer’s popular iTunes music store, which has captured about 70 per cent of the legal music download market since its launch in April 2003.”

“Recent entrants into the online music market, such as Wal-Mart, the US retailer, and Sony, the Japanese electronics group, have failed to dent Apple’s music store business,’ Morrison and Waters report. “That could change once Microsoft makes its push. But while analysts agreed the software group’s music store was well designed and easy to use, they said Microsoft faced a key challenge: it had to ensure the store worked well with scores of third-party portable music players that will be on the market by the end of the year.”

“‘The hardware and the online media service has to work as well as the iPod does with iTunes,’ said Mike McGuire, analyst at Gartner.” Morrison and Richard Waters report, “Microsoft said it had worked with dozens of manufacturers to make sure their devices would synchronise with consumers’ personal computers. But sceptics doubt companies such as Rio and Creative Labs can compete with the iPod. ‘When the average consumer goes in to the store, he is not going to ask for the Rio Carbon,’ said Mr Leigh. ‘He’s going to want an iPod.'”

Full article here.

48 Comments

  1. This is very interesting that Microsoft who needs to spend time and money getting the bugs out of their operating system would rather waste time and money entering into a market that time has proven is best dominated by Apple. Music devices are much more personal objects than computers and the asthetics are much more important. Consumers are will to pay for a quality music device that is easy to use. No competitor has come close to what Apple created in it’s iPod. So if most music enthusiast are purchasing iPods, it really doesn’t matter what Microsoft does since they can’t legally sell songs to iPod users. They should be concentrating on the cellphone business, but Apple has already started in on that phase of the market making major deals. Of course, Microsoft can always sell songs to those “Smart”phones running their software. I hope that the interface falls right into the GUI patents of Apple’s so they can suit the pants off of them.

  2. No, MSFT could easily own music downloads. All they have to do is pay people $1 per song to download them and the downloads will follow. A similar price-dumping strategy is working well for them in the game console market.

    It costs them a lot of money, but it’s either that or give it back to the shareholders. They certainly can’t seem to come up with a profitable investment strategy.

  3. All I can say is Apple has been making ALL of the RIGHT moves! It takes a humble (remember the release of the xServe) yet innovative company to make the strides that Apple has. I think the iPod and the xServe are the best examples of that from a hardware stand point. The quality of their consumer and professional software is astoundingly better than what Microsoft has come up with. The iPod has given the Windows public a taste of what it is like on the other side of the fence. The iMac G5 will be the driving force that makes them realize what computing should really be about. Let’s hope that it snows G5’s in Fishkill, NY this Christmas.

  4. eon: MS is entering this arena for one reason: to establish WMA and its DRM, since all its “partner” stores have failed so miserably. That’s where the war is. So Apple is right not to give in on Fairplay yet.

    Mike: How many times does MS have to try before it “seamlessly integrates” with anyone else? How many Windows updates did it take before it properly handled USB or Bluetooth? So I would say that’s a very big “If.”

  5. Remember when Buymusic.com was going to bury iTunes because it came to Windows first? Remember when Napster launched and according to all the analysts, it was going to blow iTunes right outa the water because of brand recognition? Then remember when Walmart came out with their censored version of a music store? All the analysts said that iTunes could never compete with the low cost of Walmart. You ever notice that when iTunes’ competitors are mentioned in articles, Napster is hardly mentioned. Some remember to mention Walmart. When was the last time you saw the name Buymusic.com anywhere? And now, Microsoft. I think the only thing Microsoft can compete with is price. That didn’t help walmart. For those who are looking merely at price, Microsoft can’t compete with Kazaa.

  6. Geez, I hope that the real MSN Music Store isn’t like http://beta.music.msn.com/ , this is a joke, right?!

    If you ever have a problem with any of the songs, you get this wonderful “help”… http://beta.music.msn.com/help/requirements.aspx …now, try to figure out the problem.

    Microsoft never seems to fail when it comes to their lack of user friendliness. Anything outside of the narrowly defined norm is met with long paragraphs of micro-text. Even the homepage of MSN.com is overloaded with micro-texted unrelated topics. You can’t find anything in there.

    I can’t imagine anyone finding Microsoft’s awkward navigating system and their system-restricted requirements as easy as using iTunes and an iPod …and we haven’t even tried to take the downloads to a player yet and tried to play them.

    If MS Music Store takes off and surpasses iTMS, then I am going to stop trying to switch people. I don’t want those kind of people wandering around the same Apple store as me.

  7. >You know it appears M$ left off another HUGE element of iTMS: ability to preview songs. I can’t seem to find how to preview them, and if they left that part off, they’ll never compete with Apple’s offering!
    ——-

    Yeah, I thought It was just me not understanding how to preview tracks. Surely M$ can’t be that dumb, even Amazon lets you preview CD tracks

  8. >Perhaps, in time MS will have a 30% market share. Tops.

    I disagree John, don’t forget that M$ have only been successful with 2 products – Windows and Office. Everything else has failed. This includes Xbox, which is still hemorrhaging money.

    However, those 2 products have made M$ the most successful company in history, which is why they can continue to throw money at products like the Xbox unit it breaks even.

    Music is very different though, the record labels will want their cut. I suppose it depends on how badly Microsoft wants to win this one, they have enough cash to bail out their music store for years to come. . .

  9. It is not a STORE, it is just a bunch of web pages, a site that requires relax security options AND Internet Explorer. LOL.

    Have a look at the Requirements:

    http://beta.music.msn.com/help/requirements.aspx

    “You must be an administrator on the computer in order for the ActiveX control to install properly. You need not be an admin to use the service once the control has been installed”

    Viruses writers have now an easier job in spite of SP2.

    Let’s start the count-down to first virus got from interacting with this WEB SITE, not a store a la iTMS.

  10. OK, I spent some money on this thing. Somebody tell me how to get my songs, all three of them, from Microsoft’s Media Player to my iPod.

    This review convinced me that I could buy something there. I did. The site works OK.

    http://www.mac360.com/index.php/mac360/more/first_look_microsofts_music_store_beta_site_it_works/

    Now I just gotta figure out how to move the music to my iPod. I won’t spend another nickle until I got that figured out.

  11. I do not think you can. Even with the WMA conversion to MP3 in iTunes it only works with non-DRMed tracks.

    Micros**t store is not compatible with the iPod. Period.

    You have to buy a different player to use M$ store. It is what they hope, that you ditch your iPod and get any iDull out there.

  12. “No, MSFT could easily own music downloads. All they have to do is pay people $1 per song to download them and the downloads will follow.”

    Sounds good to me. I’ll download stuff I want, accept the $1 per song, delete the WMA files, then buy the stuff from iTunes Store. A quite equitable transaction.

    Do you suppose there will be a limit. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> My Mac has plenty of free cycles!

  13. Interesting note about ipod compatability. M$ is telling people to circimvent their DRM. Wonder how that sounds coming out of an iPod. I may try it….

    The MS Music “Store” appears that it may help Joe 6Pack understand the reasons for DRM, and help legitimize the iTMS approach.

    But then again, maybe not. Joe can be awfully blind and stupid.

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