Analyst: Microsoft Zune with fake scroll wheel ‘hardly an Apple iPod killer’

“I spent some time recently with the Zune as well as the Zune team and here’s what we know about the device and service,” analyst Michael Gartenberg blogs for JupiterResearch.

“The Device – Take a dash of Toshiba Gigabeat, add an updated version of Portable Media Center Software (PMC isn’t dead, it’s just gone to a better place), add in WiFi and you pretty much have Zune. It’s a little bigger and thicker than a 5G 60gb iPod and barely pocketable. Like iPod, the battery isn’t removable. The case is a plastic and the overall fit and finish seem more durable and less scratch prone than the iPod. Three colors at launch, White, Black and Brown. Yep, Brown. Control is with a D-Pad disguised as a scroll wheel. This was apparent every time someone showed a unit and said, it looks like a scroll wheel but it’s not, it’s a D-Pad. *sigh*. Overall, not bad but hardly an iPod killer,” Gartenberg writes.

“The key differentiator is the sharing feature. I can share any song on the device to any other device in range. DRM content or plain MP3s but don’t get too excited. I can share the same song with the same device only once and it can be played three times or expires after three days, whichever comes first,” Gartenberg writes.

“Pricing – Unkown at this time for either device or the store. Expect this to come in priced at what a 30gb media player with WiFi should go for. Likewise, store downloads will likely reflect market prices (if there’s above $.99 there’s an issue and no real benefit below $.99 unless they really want to lose money with $.50 pricing). Purchases will be via points (similar to and interchangeable with Xbox live points). No word on whether pricing will be variable or not,” Gartenberg writes,

“The Service – The same two million songs we’ve come to know and love available for single song purchase. There’s also going to be an option for subscription pricing (similar to what’s offered with Plays for Sure services like Napster or Rhapsody) both types of files can be shared. Also, it’s a music only experience. The device will play non DRM WMV video but there are no video offerings from Microsoft for now,” Gartenberg writes.

“Overall from what I saw, Zune isn’t an iPod killer but it does offer some compelling features that Apple currently lacks. It still looks like short term market share will come from other device vendors, not Apple. The question is, will it matter? Apple’s done a good job of keeping the market focused on their features even when competitors have offered better specs, at least on paper. It’s not clear how Microsoft will counter the ability of Steve Jobs to control the message to the market,” Gartenberg writes.

“What about battery life? To really get use of the sharing feature, you need to leave wireless on and that will clearly hit battery life. While we know more, it’s still a little too early to make a call here. One reason Apple has succeeded is by showing attention to minute details that add up. This is going to be an important lesson for Microsoft to emulate if they want to achieve parity, much less move beyond iPod. Bear in mind that this is a marathon, not a sprint and how Zune does in Q4 doesn’t really matter. The key will be how fast they can iterate, rev, and seize control of the message and the marketing. Or, cede control of digital media to Apple,” Gartenberg writes.

Full article here.

Related articles:
Analyst: Microsoft Zune won’t spoil Apple’s biggest iPod Christmas ever – September 14, 2006
Microsoft unveils Zune 30GB player, Zune Marketplace; declines to disclose prices – September 14, 2006
Microsoft sees room in music player market for ‘Zune’ to challenge Apple’s dominant iPod – September 06, 2006
Analyst: Microsoft’s Zune an ‘underwhelming’ repackaged Toshiba Gigabeat; no threat to Apple iPod – August 30, 2006
Microsoft confirms brick-like Zune to be made by Toshiba – August 25, 2006
Microsoft Zune is chunky brick made by Toshiba – August 25, 2006
Microsoft to spend hundreds of millions, several years on Zune trying to catch Apple iPod+iTunes – July 27, 2006
Zune: Apple cannot lose. Microsoft cannot win. – July 26, 2006


  1. 1) What are the chances that any particular Zune user will come within range of another Zune user to take advantage of the sharing feature?

    2) If two Zune users do come within sharing distance (by whatever miracle), what are the chances that both will be listening to their Zunes at the same time?

    3) What are the chances that hackers will see the sharing features as an invitation to party on someone else’s Zune? Perhaps load it up with a trojan horse that will install itself the next time the Zune’s owner syncs up with his Windows box?

  2. I don’t think it’s a marathon. MS investors are sick of “long term” strateges that have no guarantee to pay off. They are seeing the fruits of such strateges in the continual delays in Vista.

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