“Microsoft does not expect an immediate return on its outlay for its upcoming ‘Zune’ media player, predicting a three- to five-year investment period for the new device,” Reuters reports.
“‘It is something that is going to take time,’ Robbie Bach, president of Microsoft’s entertainment and devices division, said at Microsoft’s annual analyst meeting. ‘This is not a six-month investment time horizon,’ he said, adding that it may take three, four or five years to succeed,” Reuters reports.
Full article here.
[Thanks to MacDailyNews Reader “BrooklynNYC” for the heads up.]
“The software giant plans to have one music player in the U.S. this year, expanding into other devices and regions next year, [said] Robbie Bach, president of the Entertainment and Devices Division at Microsoft,” Ina Fried reports for CNET News.
“Microsoft confirmed its plans for its Zune-branded player and service last week, but has offered scant details beyond the fact that it will have a hard drive-based music player with a built-in Wi-Fi connection on the market this year,” Fried reports. “The move is a radical departure for the software maker, which has until now tried to take on Apple with a partner approach, in which many devices and services used Microsoft’s technology. Although the devices and services were by and large compatible, the experience hasn’t been what Microsoft hoped.”
Fried reports, “Bach said Microsoft is not abandoning its partner-oriented PlaysForSure program, even as it looks to build its rival Zune approach. ‘PlaysForSure continues as it is today,’ he said, addressing a question from analysts. ‘We’re going to continue to support that,’ he said.”
Full article here.
Are Microsoft really shooting for 20% of the iPod market or are they actually targeting the 20% of the market that iPod currently doesn’t own? We suspect the latter. Regardless, we hope Microsoft spends a lot of money on this. 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.
For more on why we don’t think Microsoft can “kill” Apple’s iPod+iTunes, please read SteveJack’s take here.
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hopefully what ends up happening is Microsoft and San Disk eat up each others share
More money down the toilet. It will be just like the X-Box:”We lose $400 on every unit, but we’ll make it up in volume!” When are they going to fire Ballmer and his cronies?
In any case, this will most likely be a failure. They are just too dysfunctional these days to pull this off.
One of my neighbors was working for an ad agency and was working on the MS account. He quit. He said that he just could not justify wasting his life in incessant meetings at MS where NOTHING was ever accomplished. He said that it was always a room full of people who spent the entire meeting on their laptops or Blackberries, nobody paying attention to what was going on.
I don’t think anyone there, especially Ballmer, has the attention span to focus on a project and have it succeed.
When M$ has billions sitting around. 5 to 10 years is nothing. MS can take its time and beat Apple with FUD, lots of hype.
(batting eyelashes)
With Steve Balmer, their new chief of innovation leading the way, I’m sure that the Zune brand will be an amazing piece of hardware that will capture the imagination of the world.
This is going to be nothing more than money spent to take second place. Apple definitely controls the mind-share (and market-share) of the public.
20% of the iPod market is logical. And smaller than the 20% of the portable player market.
Consider the iPod is a moving target. So for example today’s portable player market is 100 units. 80 units of that is the iPod and 20 units of that is everyone else. M$ wants 20% of the iPod market, thus they want 16 units.
The market is growing at what 50% annually? So three years from now the market is 337.5 units. M$ has spent billions to get to 16 units in 3 years, or as the market has grown just under 5% market share. Which in M$’s warped logic would be a victory because they achieved their goal. Meanwhile M$’s partners have doubled their units in that period to 40 units and the iPod has almost than tripled it’s sales to over 280 units.
In one sentence Balmer says they are an innovative company and in the next we are building tis device and service to attack Apple – sounds like retaliation rather than innovation….
wmd, you’re exactly right . . . and that’s precisely the problem for MonkeySoft.
There will come a time when the company will either have to sh*t or get off the pot with that enormous cash reserve. BILLIONS sitting around doing nothing (essentially) is partial explanation for MS’s remarkable stock malaise over the past seven or eight years.** If they don’t begin to put this money to good, profitable, growth-based use pretty soon, you will see a stockholder revolt the likes of which the tech sector has NEVER seen.
_________________
** Five years ago MS was bumping into and around $34 per share. Today it closed at $23.80, a 30% decline in that period. Clearly, the lack of innovation, vision, and leadership within that company is rotting it from the inside; only time will tell if Herr Ballmer can TRULY become the “font of creativity” he recently promised to be. Certainly “Zune” doesn’t fulfill that promise, for it’s just another in a long line of “MonkeySee” products.
Here is the real question. . . WHY do they want to do that? I mean seriously. Stick to a few good things. Not 112341234 bad things. . Seriously. Tomorrow they will be spending millions to beat out McDonalds or something.
I think Zune will be huge.
Me and my posse need archive dls of Duran Duran. We’ll put gel in our hair and smoke some righteous buds in support of the cause. Let’s all meet at Taco Bell at midnight or at Mike’s place. His folks are in Bermuda. He’s got a cool axe and some Marshalls. Let’s all hook up at myplace unless friendster takes over.
Hopefully, Micro$haft spends hundreds of millions of dollars, but no one buys their Zune.
http://getkickedoffaplanewearingthis.blogspot.com/
I luv more competition!
We Apple consumers will be the winners in terms of getting better iPod products out faster, more innovative and hopefully more bang for the buck.
How dramatic! I think MS could make a movie out of its Zune campaign to kill the iPod. And I have the perfect title: “From Here to Eternity”.
MW: will. Zune will fail.
20% sounds reasonable
The Xbox analogy – ie selling the console for a loss and making money back on the game licenses and Xbox Live fees (not sure of that myself – anybody know if MS makes a profit there?) does not hold true for Zune.
1 – MS cannot make money from the store by impose ruiniously high “DRM” fees for music to be “Zune compatible” because its competing with Apple (who breaks even or takes a loss on it store)and the plain-jane CD. So the revenue stream of games (like the Xbox) isn’t there. They MIGHT be planning to do that with a subscription service, but nobody has really shown that a subscription model can compete with iTunes.
2 – MS is selling their player at a loss and trying to make money on their store….while their competitor (Apple) makes ridiculous profits on the player and breaks even on the store. FACT: Apple makes money even if you never, ever buy anything from the store. MS is counting on making money by tying you into their infrastructure. Like the Xbox, the best way to hurt MS is buy a bunch of Zunes and then bury them in the backyard.
Let’s fold the company and give all that cash back to the shareholders. Now that’s innovation that the shareholders can live with.
Here’s a crazy thought, instead of hoarding cash, or bleeding billions of $$$ into white elephants like Xbox and Zune, why doesn’t M$ pay a dividend to its shareholders. THAT would be a radical product. Guaranteed to boost the stock price.
HOW MICROSOFT CAN WIN AGAINST APPLE’S IPOD
“Hello, I’m Clippy, would you like to buy a song on Zune?”
no
“Hello, I’m Clippy, would you like to buy a song on Zune?”
no
“Hello, I’m Clippy, would you like to buy a song on Zune?”
ok
“Hello, I’m Clippy, would you like to buy Zune Player to play that Zune song?”
no
“Hello, I’m Clippy, would you like to buy Zune Player?”
no
“Hello, I’m Clippy, would you like to buy Zune Player?”
no
“Hello, I’m Clippy, would you like to buy a song on Zune?”
no
“Hello, I’m Clippy, would you like to buy a song on Zune?”
no
We already have you credit card number. Think again?
Crap.
And yes, Zune is your little brother. Stop him now.
They aren’t interested in 20%. They want the whole damn market. When ever has Microsoft been content with co-existing with their rivals? They are like a plague of locusts from one technology to the next. Hopefully something will put an end to it somehow, but they can afford to make mistakes and survive for the rest of our natural lives, that’s for sure. They’re cashed up like a friggin bank!
You can bet that Apple will be willing to risk it all again on the next iPod. That’s what they did when they replaced the mini with the nano (see the wikipedia article “ipod nano”). So… good luck to Microsoft.
You can also bet that Apple will do the same with its OS. If Leopard is anything less than amazing, I will be disappointed. It has to deliver either the killer app or a new user experience. Otherwise, people will settle for Vista’s eye-candy.
I think it will be a really good thing if Microsoft spend millions promoting Zune, but don’t make much of an impression.
They and their apologists keep trying to make people believe that the iPod only succeeded because it was heavily promoted. If they spend even more but fail to succeed, it will show that advertising isn’t the only factor.
Of course everybody else knows that the secret of the iPod’s success was word-of-mouth publicity, but the Microsoft FUD machine tries to play down that side of things.
Naturally, their army of loyal writers will be loudly singing the praises of Zune and by an amazing coincidence will find that there are ‘serious’ issues that the public will need to be warned about over iPods, but the public will know that their particular iPod doesn’t have that problem and will remain happy with them.
It’s very important to Apple that Microsoft are seen to pull out all the stops to promote Zune. Half-hearted measures like we’ve seen from other MP3 manufacturers haven’t made much of an impression, so Steve will goad Bill into trying as hard as possible and failing all the more spectacularly. Steve will be able to play Ballmer like a fish on a line.
Apple gets by with 2-4% of the computer market so why can´t Microsoft get by with a small fraction of the MP3 market?
Microsoft has never claimed to say they were trying to put the iPod out of the business; they see a chance to make some money on the MP3 market. Just like they did with the game console market.
Just a thought-but wouldn’t M$ be better served spending years (instead of minutes) and millions (instead of $5.00) on Vista security instead of backing a loser hope of beating Apple at one of its strongest areas? Idiots!