Why Microsoft’s Zune is doomed to fail

“You have to hand it to Microsoft. The company knows how to create a buzz about a product. From all the noise about Zune, you would think the ‘iPod killer’ actually has a chance. Sadly for Microsoft, it won’t happen,” Stan Beer writes for iTWire.

“People point to Microsoft’s Xbox and Xbox 360 as proof that the company can successfully play in the hardware space. The question they need to consider, however, is how much money has Microsoft made from Xbox? The answer isn’t pretty,” Beer writes.

“Apple has always been a hardware and software company. Its entire history has consisted of a business model constructed around selling hardware and software in tightly bound packages. This is iPod and iTunes, Mac and Mac OSX. For Apple, it works spectacularly well,” Beer writes. “Microsoft is a pure software company. Its entire history has been built around selling software. It can’t make money doing anything else – not even on the internet.”

Beer writes, “The problem for Microsoft [is that] operating systems and office productivity software are gradually becoming obsolete commodities. Microsoft needs to find new areas in which to grow. That’s why we see Microsoft attempting a project like Zune. It’s a shot in the dark and it’s doomed to fail.”

Full article here.

[Thanks to MacDailyNews Reader “Steve J.” for the heads up.]

MacDailyNews Take: Mmmm… Beer gets it. BTW, if Microsoft’s intention was to throw the media off the Macintosh story with this “Zune” nonsense, it’s working pretty well, so far.

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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

34 Comments

  1. May be, and just May be, that Microsoft will be able to get a little part in the 25 % that iPod does not have. Microsoft can compete with Creative or Sony, but it is not a piece for iPod. So keep dreaming Steve Balmer….

  2. IT MEDIA IN A BUBBLE:

    At least with the “Inside the beltway” croud in Washington, their news gets relayed to the average Joe.

    With tech, this bubble of readers and columnists that write for this group all live within a vaccum.

    By just reading tech news, one would think MS already commands a 50% market share for Zune. MS represents news because they are abolute giants, with the perception that they can simply buy their way into markets.

    While they can indeed buy there way into markets, they cannot dominate the markets they buy into.

    People know MS will quickly become Apple’s #1 competition and #2 HW/SW option to iPod. But dominate the market? No way.

    Come market time, MS is going to actually need to sell product in mass volumes… Don’t count on it.

    Count on reality giving MS 13% market share by years end, with most of this share being consolidation of it’s “partners” market, coupled with a few newbies, and a few iPod-to-Zune switchers.

    Of all the “possibilities” Zune will deliver, there is one that is set in stone: MS will be able to point to Zune’s incredible sucking sound on the companies financials.

    I am sure shareholders will again love to see MS four-years late to what was once upon a time, a huge growth market, only to throw massive funds just to be able to play in the game – a game they are not likely to ever dominate, or turn a profit on.

  3. Microsoft will succeed. Microsoft will succeed. Microsoft will succeed.

    iPod relegated to 2% market share. iPod relegated to 2% market share.
    iPod relegated to 2% market share. iPod relegated to 2% market share.
    iPod relegated to 2% market share. iPod relegated to 2% market share.

    you are all losers on this website. This is the beginning of the end.

    Enjoy the last few days of iPod/iTunes dominance.

  4. What people are not seeing is the big picture.

    Microsoft is using it’s consumer division as the inventive and growth engine. The Office and Windows divisions are the cash cow to fund the growth machine, which directly mirrors an Apple business model in controlling the hardware and software.

    The big problem with this model is that Microsofts growth division is neither creative or profitable, and have failed to find new and emerging markets.

    1. xBox has shown a profit for only one quarter during it’s entire existence, and it entered a market that was neither new and did not bring any huge “Wow” factor.

    2. Zune is entering a rapidly maturing market, and from the looks of their player is nothing more than a cludgy “me too” product. This is inventive? This is “Wow?”

    The consumer division is clearly showing its stodgy roots within the parent company, as they are doing nothing to create a new paridim with the consumer, and will continue to act as nothing more than a giant Hoover on profits.

    I can only imagine if Steve Jobs had this effect on Apple’s “creativity” and stock price over the past five-years. He’d have been canned three years ago.

    Nice to see MS shareholders and board feel cozy enough to simply sit back and let stale management and the founder rule the roost.

  5. Ron:

    I enjoyed your well reasoned argument, but maybe, for the benefit of us dullards in the audience, you could flesh it out just a bit more.

    How, exactly, will Microsoft relegate Apple to 2% market share? Please explain the process(es) by which this will happen.

    Thank you in advance for your time and attention.

  6. The loosers at microsoft does not have creativity or inovation, they always have to wait until some one else came with a new creation, and the, Microsoft will try to copy that new device, but they are not even capable of make good copies. The only products that they don’t copy, they just dont work, like “orgami”.

  7. M. T. MacPhee,

    you took the words out of my mouth.

    Ron’s rhetorical prowess is very impressive.

    His keen insight into complex issues and subtle linguistic mastery in expressing his arguments but keeping them understandable for the normal reader is a lesson to us all.

  8. “Apple has always been a hardware and software company. Its entire history has consisted of a business model constructed around selling hardware and software in tightly bound packages. This is iPod and iTunes, Mac and Mac OSX. For Apple, it works spectacularly well,” Beer writes.
    ——-

    It’s funny how just a few years this same description of Apple was used to explain why Apple was doomed to fail. Remember how many pundits were saying that Apple had to get out of the hardware business and just sell the OS? I do. Now “For Apple, it works spectacularly well,” Hmmm. A lot of us knew it all along.

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