“Microsoft said Friday it plans to release a new music and entertainment player and accompanying software under the ‘Zune’ brand this year, in a belated attempt to challenge the dominance of Apple’s iPod player,” Reuters reports.
“The world’s largest software maker faces an uphill climb in closing the gap on Apple’s iPod media player and iTunes Music Store, the runaway leaders in their respective areas,” Reuters reports. “The iPod holds more than half of the digital media player market, according to research company NPD, while iTunes accounts for better than 70 percent of U.S. digital music sales. ‘Creating a lifestyle device, Microsoft is clearly going to face a battle here,’ said Michael Gartenberg, research director at JupiterResearch. ‘It’s going to be hard for them to create the same level of cachet that Apple has with the iPod.'”
Full article here.
[Thanks to MacDailyNews Reader “Lurker_PC” for the heads up.]
“Billboard Magazine broke the news in its July 29 edition in a exclusive interview with Chris Stephenson, the company’s new general manager of marketing for MSN Entertainment Business,” The Wall Street Journal reports.
“The new product is the company’s strongest effort yet to rein in Apple Computer’s iTunes/iPod juggernaut, currently responsible for about 70% of the digital music market and 75% of the portable digital music player market, Mr. Stephenson told Billboard,” WSJ reports.
Full article (subscription required) here.
Antony Bruno reports for Billboard:
• Microsoft officials for the first time have confirmed that the Redmond, Wash.-based company is readying a portable music player and integrated service, shedding new light on a topic that has fueled rampant speculation in news reports and blog postings for weeks.
• In an exclusive first interview with Billboard, Chris Stephenson, Microsoft’s new GM of marketing for MSN Entertainment Business, says the company will later this year launch Zune, an umbrella brand for what he says is “a family of hardware and software products” targeting various digital entertainment services.
• The first implementation of this will be the portable music player and digital music service, in what is the company’s strongest effort yet to rein in Apple Computer’s iTunes/iPod juggernaut, currently responsible for about 70% of the digital music market and 75% of the portable digital music player market.
Full article (subscription required) here.
“Gartenberg said, in creating its own products Microsoft also risks alienating partners such as Creative Labs Inc. and Samsung Inc. Those companies are already using Microsoft’s software for their own portable entertainment players, although they’ve had little success against Apple’s juggernaut,” Allison Linn reports for The Associated Press.
“‘This is a very tough message,’ Gartenberg said. ‘If you’re the head of Creative, as of this afternoon you’re not just facing Apple, which was bad enough, you’re now facing you’re partner.’ He said it could have even deeper repercussions if people in other industries grow wary of partnering with Microsoft for fear the company will decide to launch its own, competing product. Microsoft’s success has been built on working with hardware manufacturers to make products running its software. ‘It’s certainy going to cause a lot of fear and uncertainty and doubt in the ecosystem,’ Gartenberg said,” Linn reports.
Linn reports, “Gartenberg said Microsoft confirmed to him that it would release a wireless device that would play both music and video this year. The device will have an accompanying content service, Gartenberg said.”
Full article here.
Michael Gartenberg blogs for JupiterResearch, “This is an acknowledgement that Microsoft is clearly not happy with Apple’s dominance in digital music. I don’t think it is concern about new growth scenarios. It’s more a concern that Apple controls a key endpoint in the digital home and that Apple bits flow only to other Apple controlled bits or devices. That scenario doesn’t bode well for Microsoft’s larger ambitions Second, even though Microsoft still talks about the diversity of the Windows platform asan overall advantage, let’s face it, the platform argument is dead and licensees will have to deal with it. On one hand, no one has ever successful created a business where you license technology to licensees and simultaneously compete with them on the device side. On the other hand, it’s not like there’s a lot of other places for licensees to go to get technology.”
“Bottom line, when Microsoft decides to enter a market, you can’t ignore the impact they will make. It’s likely that by force of will and spending lots of money on marketing with a high cost of acquisition on new users, they will can capture some market share,” Gartenberg writes. “Early market share, however, isn’t likely to come from disgruntled iPod users looking to switch. The real losers in the short term are likely to be the likes of Creative, iRiver and other former partners that have failed to deliver to market share from Apple and will now find themselves not only competing with Apple but with their former partners from Redmond.”
Full blog posting here.
So, it’s confirmed. We suspect that Microsoft is really shooting for Apple’s iPod+iTunes market leftovers, not the iPod+iTunes market itself. Regardless, we hope Microsoft spends a lot of money on “Zune,” even if they are way too late (as has been the case for quite some time — as there are way too many iPods out there and iPod+iTunes is simply too good). While we don’t see Microsoft’s efforts as much of a threat to iPod+iTunes, we also hope it pushes Apple by providing some measure of real competition that will drive innovation even faster.
As we’ve written before in response to the “Zune” rumors, it remains to be seen how their so-called “partners” like Creative, SanDisk, Toshiba, Sony, MTV, Napster, etc. will react to this betrayal by Microshaft. There still is, after all, a nice minority share of the market that iPod+iTunes doesn’t own. It looks like Microsoft wants it all for themselves as usual.
Of course, if Microsoft starts to show any momentum, Steve Jobs could just call up the also-ran device makers and music services and license FairPlay to them. Then everyone except Microsoft would be iTunes and iPod compatible. Whoops! All Zune-related development, marketing, manufacturing, and other costs = total write-off. Game, Set, Match.
That’s one way to go. Another is to just stay the course, which would be even easier to do if Mac growth were to continue to ramp up at the same time. And, if just some of what’s rumored for next-gen iPods comes true, then Microsoft and the rest of the roadkill are in for the usual world of hurt. Even if Microsoft could somehow manage it, it’d take quite some time for them to significantly impact Apple’s iPod+iTunes juggernaut.
Related articles:
Microsoft’s rumored ‘iPod killer’ poses little threat to Apple’s domination – July 18, 2006
Microsoft plans Super Bowl ad for ‘iPod killer’ – July 17, 2006
Sounds serious: Microsoft approaches iPod accessory makers for Zune would-be ‘iPod killer’ – July 12, 2006
Microsoft preps complete line of Xbox-branded digital-media products – July 11, 2006
Photo of Microsoft’s ‘iPod killer?’ – July 11, 2006
10 reasons why Microsoft’s ‘iPod killer’ will fail – July 11, 2006
Enderle on what it would take for Microsoft to kill Apple’s iPod – July 10, 2006
Microsoft: ‘iPod killer’ reports based on ‘speculation and rumors’ – July 07, 2006
Can Microsoft hit a fast moving target? Apple likely to debut wireless iPod this year – July 07, 2006
Analysts: Microsoft faces uphill fight to supplant Apple’s iPod+iTunes market dominance – July 07, 2006
Microsoft plans to convert iPod users by replacing iTMS songs with free WMA format songs – July 06, 2006
Microsoft to release wireless ‘iPod killer’ by Christmas to challenge Apple – July 05, 2006
Analyst Wu: Microsoft unlikely to dethrone Apple iPod+iTunes – June 21, 2006
Microsoft preps iPod+iTunes killer – June 19, 2006
Report: Microsoft readying Apple iPod+iTunes rival – June 16, 2006
Microsoft: No iPod killer planned – June 05, 2006
Microsoft, Toshiba, DoCoMo, Victor to develop Japan iPod+iTunes killer – June 02, 2006
Patent application shows iPod capable of live wireless video conferencing – June 13, 2006
Apple patent application filed for wireless iPod+iTunes distribution – May 04, 2006
Generator Research: Apple to Ship $4.2bn in Wireless iPods (WiPods) by 2010 – March 14, 2006
Ready for your wireless Apple iPod? – February 09, 2006
Wireless iPod? CSR and PortalPlayer to bring wireless connectivity to personal media players – February 08, 2006
Wireless Apple iPods coming in 2006? – December 09, 2005
More blood on Apple iTunes Music Store’s play button: MyCokeMusic is dead – June 20, 2006
More blood on Apple iPod’s Click Wheel: iRiver gives up on digital media player market – May 23, 2006
More blood on Apple iPod’s Click Wheel: Sony’s Walkman Bean is cooked – February 13, 2006
More blood on Apple iPod’s Click Wheel: Dell dumps ‘DJ’ hard-drive MP3 player line – February 04, 2006
More blood on Apple iPod’s Click Wheel: iRiver pulling out of Europe? – February 01, 2006
More blood on Apple iPod’s Click Wheel: Thomson gives up on MP3 player, CE markets – December 12, 2005
More blood on Apple iPod’s Click Wheel: BenQ withdraws from MP3 player markets – November 28, 2005
More blood on Apple iPod’s Click Wheel: Olympus halts production of portable digital music players – November 09, 2005
More blood on Apple iPod’s Click Wheel: Rio is dead – August 26, 2005
Apple’s iPod has blood on its Click Wheel: Virgin Electronics is dead – March 08, 2005
Apple’s iTunes Music Store has blood on its play button: BuyMusic.com is dead – March 28, 2004
Thank you, Mac Perfume. I read all of the boring posts, got down to yours, and laughed out loud. You, my friend, are NOT a Zune.
I can’t begin to think what they think they could accomplish with this. iTunes already works with windoze, and building a library does not require using the iTunes Music Store or, for that matter, an iPod, whatsoever. Having a deliciously designed portable music player is accessorizing at its best, and Microsoft has never accessorized tastefully, insisting upon gagging the critics with fugly. I have two iPods, neither of them new, and I use iTunes primarily as a radio station. Almost 100% of my iTunes Library is ripped from my own CD’s, with the occasional purchase, especially of the free choices every week, the occasional download from band’s sites or Salon or the Phoenix, and I load up my Shuffle once a week to keep me company on the walk to work. My 20G iPod is a backup harddrive and an emergency bootup disc. I can’t begin to imagine what Microsoft could offer to me, regardless of the fact that I run a Microsoft-free zone both at home and at work, with nothing but success to show for it. The joke will catch up to them, I’m sure, but sheer inertia will forestall the inevitable.
On Jun 5, MS flat-out denied any such device
http://macdailynews.com/index.php/weblog/comments/9777/
Now, 46 days later, they ‘announce’ something?
If anyone did that to me, I would call them a liar, and I simply wouldn’t trust or believe anything they said again.
I don’t think Apple has anything to worry about, if “Origami” is any example of what MS can do.
But if I were MTV (Urge), Creative, or Real, I would be considering legal action against MS about non-competition clauses, antitrust rulings, etc.
Anyone who even is approached by MS to “partner” w/ MS should immediately slam the door on MS because you simply can’t trust them.
I’m not saying anyone should blindly trust Apple either, but between the two, Apple is definitely the lesser evil.
I wish I could feel sorry for these other companies, but they make crappy products anyway, and they should really grovel to license FairPlay.
I wonder if hp would reconsider partnering w/ Apple to sell hp iPods again… I wonder if they’re kicking themselves for getting out of that…
Microsoft “confirming” and “readying” a product is like… well… like… OK, it’s like Microsoft “confirming” and “readying” Windows Vista.
By the time it gets close to happening, Apple will be several generations more advanced, and the MS product will probably never be released because it will never be good enough. However, the ongoing rumors will drive Apple to innovate faster. In the mean time, Microsoft’s “valued” partners (the existing TRUE competition for iPod/iTunes) will become even weaker due to the perception that Microsoft is going “solo.”
Frankly, this is a Win-Win situation for Apple and its customers.
MS can’t even get original with their own rumor mill. First they deny a product exists and then announces it not too much later. Not only are they trying to copy the iPod eco-system but now they even copy the Steve Jobs approach to the rumor mill. What I can’t determine now is if this is “ha ha funny” or “sad funny.” Next thing you know they will copy the mac OS.. wait a minute, done that. How about buying other companies rather than come up with ideas of their own… wait, done that. How about an original idea… MS BOB, Origami… wait, that didn’t turn out so well. I got it.. it is sad funny. I lift my glass to you Microsoft. The most uninspiring and unoriginal company in the world. Where do we want to go today? Apparently nowhere that you can think of on your own but at least you will ask for directions.
Get Steve off the “we got a monopoly, why bring out anything new” mindset he is apparently in.
I quote Apple CFO Peter Oppenheimer: “We’re not sitting around doing nothing.”
Apple brings out new products when it’s good and ready. Can you say “category killer”?
Just like those stupid People-ready commercials:
She says: “What do we have that no one else has?”
He looks at her with a blank look on his face suggesting he is thinking “f–k if I know”
She points to the mindless sheeple wandering through the halls.
He says “Those Peons?”
“Exactly.” She says.
He thinks, “My God, what’s she been snorting today?”
I took a few liberties, of course!
” width=”19″ height=”19″ alt=”tongue wink” style=”border:0;” />
New MS slogan, “What do you want to snort today”
Why ya all bein’ playa hatas? This is Willie G as in Gate$$$$$$$$$$$$$$$. Listen up homies, since the 50 cent deal wazn’t down wit Dr. Steve-O, I’z been doin’ some serious tinkin’. Da Zune is one slammin’ piece o’ bootay if I do say so mizeself. Me and 50 cent haz been workin’ real hard on this project. We’re talkin’ hard-core ya all. Were so close he even let’s me call him fidy fo’ short, ya know what I’m sayin’? I gots some serious street cred, and my bad ass company Microsoft will beez sponsoring the next 50 cent assault on da U-S of A. Weeze gonna be givin’ free Zunes to all da fanz. I’z gonna be makin’ guest appearances at all da showz via satellite, just like dat time I sho’ed up at Mac World, know what I’m sayin’. I gots me a new style and 50 cent sayz it be freakin’. So check me out ya all, and keep it real. http://www.worth1000.com/emailthis.asp?entry=45841
Boy, don’t you know the real brains and project leaders around M$ were hoping the management would really try to emulate Apple this time and play it very close to the vest with this one. But no, monkeyboy’s just got to flap those gums. Better get to work homies…NOW you’ve GOT to ship something (else). Prolly need to pull some dudes off the wristwatch thingy to ‘push’ this one through eh? Hehe…hehe…Ha hahhha
Hmmm… Apple launched the iPod in 2001. Now it’s 2006, and MS is nearly ready to launch a product… looks like everything is right on schedule.
Connor MacBook: “Apple brings out new products when it’s good and ready.”
What company doesn´t?????
Ford guy: We don´t have the tires on the car yet.
Ford guy 2: Bring it out anyway, Connor MacBook says only Apple brings out products when they are ready.
Dumb, connor, dumb.
Microsoft OS software is kind of weak, but its hardware products are very good.
This is going to be big competition for Apple and will push Apple to develop things faster.
“Microsoft OS software is kind of weak, but its hardware products are very good.
This is going to be big competition for Apple and will push Apple to develop things faster.”
Errrr.. yeah, great keyboards.. wicked mice.. what else have they done? Oh yes, the XBox – the ugliest-looking games console on the planet.
And now Zune… possibly the most blatant iPod rip-off anyone’s yet produced, yet still managing to look like something out of a 1970’s sci-fi B-movie.
Everyone I know loves Microsoft products. They are fast, efficient and secure. They have all been waiting for a real MP3 player that is open and doesn’t run stolen software. Every person who uses iTunes on the PC will immediately switch over to the Microsoft player because we all know that it will be superior in every way to the crap that Apple puts out. It will be cheaper, have more feature and will allow you to run software from a large variety of stores.
Without money from the iPod, Apple computer will dry up and blow away. Good by Apple! Glad to see a lock-in company like Apple go out of business.
It’s going to be called the “MS Hoover” or some such, ’cause it’ll suck!
What next?
The Microsoft Music Store?
Just plug in your Tune (er, no, that’s not it), Dune (nope, not that either!), er, Zune player (now your getting it) and download 50 zillion of your favorite songs encoded in glorious 8-bit sound.
Then, plug your Zune (well remembered!) player into your friends PC and share all the viruses/malware/spyware you have between the two of you.
Genius.
as soon as it comes out, Apple should license it’s DRM system to everyone but Microsoft. Then make money on all the other players on the market, Just like MS does with windows. Zune Killer.IPod will still be as strong as ever because of it’s cool factor.
You guys are all underestimating Zune.
Hans, you missed my point entirely, but now that you mention it I can think of one company in particular that tends to rush products to market before they’re ready for prime time.
Yes we’re all still reeling from the wild success of Origami and the computing revolution it caused. Now this?
Wake me when it’s over.
Connor – I give up, which one? And what product was it?
Apple rushed the Cube to market in which no one really wanted it. Ditto for Macmini – this was to be the machine that won the windows users over…didn´t happen. Taking the time to do Better marketing surveys would have shown little interest in the products as they were released.
It must be jumping the shark when contempt for MDN outweighs hatred for M$..
I hope they do well.
Competition is capitalism.
cb.
What is contemptible about the MacDailyNews Take?
Just a wait a day or two and watch many “analysts” and “experts” echo back exactly what MDN says in their take. It happens frequently.
Canon brings out a digital slr, so does Nikon.
Bad business move by Nikons part? Nikon copying Canon?
Chrysler brings out a mini van; later so does Toyota and Honda. Bad moves by Toyota and Honda to copy the minivan idea?
Coke brings out Cherry Coke; later Pepsi brings out Cherry Pepsi. Bad move by Pepsi?
You guys are all so silly trying to talk down Microsoft for bringing out a new product. I think its great for us all. More competition means we consumers have more choice.
Mark; “It happens frequently.”
LOLLOLLOl Lol