“I responded last week to a comment left on our blog by Mike Evangelist hypothesizing that Microsoft could do some serious damage to Apple’s iPod domination by launching its Zune music player at $99. Well, so much for that theory. Today, Microsoft announced that the Zune will retail for $249.99, $0.99 more than Apple’s fifth generation iPod video. I suspect that still represents a subsidy of the product, but probably only about $50 per device,” Carl Howe, principal analyst, blogs for Blackfriars’ Marketing.
Howe writes, “At that price, this interim product is going nowhere. It will sell to those people that love Microsoft products and few others. Microsoft even managed to alienate music lovers who already have bought a lot of Microsoft music, since the player won’t play protected Windows Media files other than those from the Zune store (that includes ones bought from stores like MSN!), and it will impose sharing restrictions on unprotected MP3 files that the user owns. With no compensating price advantage, this marketing plan provides little differentiation from iPods and many disadvantages. And without a massive deployment of these devices, the wireless sharing feature becomes moot… Zune 1.0 appears to be dead on arrival.”
Full article here.
Microsoft’s Zune is D.O.A. and, note to Microsoft, no amount of faux “Zune fan” websites is going to help.
Related articles:
Microsoft sets 30GB Zune price at $249.99 – September 28, 2006
How Microsoft’s Zune can kill Apple’s iPod – September 21, 2006
Microsoft’s Zune insanity – September 21, 2006
The Microsoft Zune 1.0 dud – September 20, 2006
Microsoft’s underwhelming Zune a ‘viral DRM’ device – September 18, 2006
SanDisk teams with RealNetworks against new common foe: Microsoft Zune – September 18, 2006
Creative does Apple’s dirty work by immediately attacking Microsoft’s Zune – September 17, 2006
Motley Fool’s Jayson: Microsoft’s ‘just plain ugly’ Zune a meager offering, not an iPod killer – September 15, 2006
What’s in a name? ‘Zune’ a French-Canadian euphemism for penis or vagina – September 15, 2006
Crave at CNET: ‘Microsoft Zune, all the excitement that brown can bring’ – September 15, 2006
Microsoft’s Zune underwhelms – September 15, 2006
Enderle: Microsoft Zune ‘a design mistake’ – September 15, 2006
Microsoft hypocrisy exposed with Zune: What ever happened to ‘choice?’ – September 14, 2006
Analyst: Microsoft Zune with fake scroll wheel ‘hardly an Apple iPod killer’ – September 14, 2006
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
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
Computerworld review: ‘Apple’s new iPods are better than ever’ – September 27, 2006
PC Magazine’s 19th Annual Readers’ Choice Awards for MP3 players: Apple iPod line – September 25, 2006
USA Today reviews new Apple iPod nanos, updated iPods, iTunes 7 (each earns 4 stars out of 4) – September 21, 2006
Time Magazine’s Gadget of the Week: Apple iPod 80GB – September 21, 2006
CNET Editor’s Choice: Apple fifth-gen updated iPod – ‘best, most attractive iPod to date’ – September 20, 2006
Disney’s remarkable 1st week iTunes movies sales should have studios clambering aboard Apple train – September 20, 2006
Disney sells 125,000 movie downloads via Apple’s iTunes Store in first week – September 19, 2006
PC Magazine review: iTunes 7 ‘Apple’s best effort yet’ (4 stars out of 5) – September 15, 2006
CNET Editor’s Pick: Apple’s new 2G iPod nano – ‘sure to be top choice among wide range of users’ – September 14, 2006
Apple debuts new iPod in 30GB and 80GB with Hollywood movies, games and new lower price – September 12, 2006
Apple intros new iPod nano with new aluminum design in five colors and 24-hour battery life – September 12, 2006
Apple unveils new iPod shuffle: world’s smallest digital music player – September 12, 2006
Apple debuts iTunes 7 – September 12, 2006
From the desk of Brian Allen
Zune to be dead.
No, because the average person out there has no f-ing idea what in the hell Zune is anyway. Besides, how in the hell can you have fan websites for something that hasn’t even been released yet anyway?!? LOL
I once owned a “Zune fan”. Yeh-heh-hehessssss. It was one of those cheap paper ones that all de geishas love to be seen with.
I remember it well . . . it was brown, it broke after only an hour, and no one else I knew had one.
Kind of like de Zune.
wow, great.
who the hell is blackfriars communications?
what would they know?
this is nothing more than a trashy opinion piece.
on a trashy macdailynews site.
competition will be good for the ipod, and i for one like the zune.
Hey, come onnnnnnn — I KEED. I keed because . . .
. . . with Microsoft it’s so easy to.
(pseudo) Triumph, please give it up. It has never been funny. Not once.
well, daveo, so far you’re the only one – at least here…
‘Sputnick’, ah, I mean ‘daveo’ welcome back!
We missed your foul, trollish stench.
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daveo said “competition will be good for the ipod, and i for one like the zune.”
Hey we found that one guy!!
Too bad you won’t be able to “share” your Zune music with anybody.
Then why don’t you go live with Steve Ballmer, daveo?
People said iPod would never be successful too…
In 2001, the market that Apple created and owns did not exist.
although neither Zune nor Microsoft will ever have the coolness factor nor the quality of Apple, the sad truth is that they can give them away to every man woman and child in the US and not go broke. Don’t count MS out, you and I will be in the grave and his money will still be causing havock
I don’t like it but is a fact
“competition will be good for the ipod, and i for one like the zune.”
And let me guess Daveo, Steve Ballmer is your surrogate father and he’s giving you a Zune for Christmas if you bash the iPod.
Daveo, how can you “like” something that DOES NOT EXIST and WILL NOT UNTIL MID NOVEMBER (at the very earliest)?
I bet you have a unicorn in your back yard too! Amd jow about that cold fusion car of yours?
Pathetic, Sputnik.
They don’t call it the iTurd for nothing.
I’m sorry…my other personality, the deeply retarded one, escaped for a minute there. I’ve managed to suppress it now.
“competition will be good for the ipod, and i for one like the zune.”
yeah because the iPod sure has been lacking in features and usability. Need some o that good ol’e competition to light a fire under Apple to get them to come out with sumthin goood fer a change.
Uuuuuhhhhhnnhhh…!!! I just took a zune.
M$ will sell it’s numbers to the Redmond faithful and some market laggards to start, but will pull over an insignifcant number of iPod/iTunes owners.
What MicroSoft blew is which market to enter first.
Consider the following:
• The HD-based market represents only 10% – 15% of the overall MP-3 market.
• Do the math, M$ will capture – at best – 25% of this market.
• The market share M$ does capture will be mostly PlaysForSure Redmond followers.
Results:
• M$ loses millions in the Zune effort converting it’s own customers to a solution that is even more closed.
• nano dominates.
• Apple launches full-screen iPod video at MWSF ’07 and delivers more hollywood studios, HD, and iTV, along with that “one more thing” HDTV’s with iTV built-in.
Any market share Redmond hoped to catch in the HD-based media market will be crushed by Apple in short order, while M$ will hav stuffed the channel to claim “huge sales of Zune” but will have a massive headache on its hands for the better part of ’07 trying to figure out how to dump inventory no one wants to by.
“It will sell to those people that LOVE Microsoft products” (???)
Well, in that were truly the case, they’ll sell zero Zunes.
Oh, and I seriously doubt Microsoft is subsidizing the Zune by ANY amount. The amount of profit in today’s consumer electronics (with lots of Chinese-made components) would just blow many people’s minds.
This whole Zune thing speaks to is mindset of the leadership at Microsoft: They can’t stand it if there’s ANY G*dd*mned computer-related market in existence that they don’t completely dominate. The want to own the search engine market, the home gaming business, the home entertainment digital hub, and the portable music/video player market.
What are the odds that MS will succeed in any of these markets? Not good.
Why did the try to do so anyway when doing so wouldn’t impact their cash cow? 1) Because they’ve got the money to try, and 2) the bloated egos of a couple of technology emperors who are drunk with power. I think Gates saw Steve Martin’s old joke about his goal in life: “Oh, to amass great power and wealth and crush all who oppose me.” It’s just that Gates took this joke to heart.
Gates can give away 90% his money to charities and STILL have more money than anyone can ever spend in a lifetime. But it’s like smearing lipstick on a pig. Doesn’t change the fact that Gates is a turd.
Selling this thing at $99 was never an option for MS. Only games consoles can be sold as big loss-leaders, because you have to spend money on games. Most music on music players is ripped from CDs so they were never going to get anything like their money back from downloads. I still think with a big advertising campaign they will sell pretty well, but as soon as people realise how restrictive the sharing is, and that they can’t play “Plays for Sure” tracks, sales will crumble.
The first of the comments that accompanies the article is an excellent analysis of why Zune is almost certainly doomed to fail. IMHO, it’s better than the article.
DBS,
that’s not how it is. Microsoft is a ‘public’ company. They can’t just use their billions like that because of the shareholders.
There is no doubt in my mind that MS is in decline, although it may be a slow process.
Apple have a huge advantage now. Its superior OS, combined with the fact that Macs can even now use all other OS’s with relative ease (in the near future it’ll be child’s play to switch from OS to OS).
Add to this the good design and image factor.
Apple’s sales’ curves are already showing which way the wind’s blowing, and I believe the September quarter results, coming out in a couple of weeks are going to shock (positively that is) even some posters on sites like these…
and APPL will take off.
Cant wait to get a Zune.
Of course I meant AAPL.
If I started a business, got very lucky and made billions on a fluke, and then tried to stay on top by shamelessly copying smaller innovative companies, I couldn’t sleep at night. How can Steve Ballmer and Bill Gates live with themselves?
Gates obviously has a problem with all of this thievery, in that, he is giving away millions to “help the children,” in a feeble and transparent attempt to hide his stinking ways behind a mask of charity. But in my mind, this is like Hitler feeding a stray cat. Gates is giving away what was never morally his in the first place. These people are crooks and intellectual parasites.
The Zune will be a cobbed-up piece of crap, it will probably wirelessly transmit malware from player to player and then back to PC’s, Microsoft will stop supporting the thing after two years, and Apple will stay on top. OSX will kill Windows. OSX is the freight train, ipod is just a little icing on that cake. Zune is a pebble that Microsoft is tossing at the avalanche that is OSX.
“who the hell is blackfriars communications? what would they know?”
daveo
if you make a couple of clicks on their web site you could answer your own questions.
They appear to be a team of 2 tech analyst/consultants with 25 years of experience each. So individually, each has been working in the tech industry 10 more years than your total number birthdays.
Of course the Zune is DOA. It’s the size of an iPod from 2001. What kid is gonna be happy unwrapping that brick this christmas? Especially when it’s the same price as an iPod. Any Zunes that accidently get bought are going to be exchanged for iPods before New Years.
Soon the Zune will be another Origami. Remember the Origami? Neither does Microsoft.
“yeah because the iPod sure has been lacking in features and usability. Need some o that good ol’e competition to light a fire under Apple to get them to come out with sumthin goood fer a change.”
Good to see some reality in the conversation. Apple has been sitting on their arse not doing much in terms of features. Having Microsoft in the mix might spur them along.
Rock on Dion!!
Love the: “Zune is a pebble that Microsoft is tossing at the avalanche that is OSX”
and: “OSX will kill Windows. OSX is the freight train, iPod is just a little icing on that cake”
Oh yes, I like the look of the future…
“Microsoft even managed to alienate music lovers who already have bought a lot of Microsoft music, since the player won’t play protected Windows Media files other than those from the Zune store (that includes ones bought from stores like MSN!)”
what What WHAT??????
M$ has complained that the iTunes and iPod are not compatible with the M$ Windows Media files. Now they kicked directly PlayForSure in the balls. PlayForSure is now DEAD.
http://www.playsforsure.com/
“Choose your music. Choose your device.
Know it’s going to work.”
“When your device and music service are compatible with each other, all you have to do is choose the music that’s compatible with you. Look for the PlaysForSure logo on a wide selection of devices and music stores.”
Mafiasoft really is forth their name!
Where is the MDN take on this one??????
And where is the lawsuit from the angry customers?
(Did someone accidentaly buy other than iPod???)
Some product ideas for the Zune ecosystem:
1. A faux Zune enclosure which houses an iPod nano. That way Microsofties can continue to use iPods at work and not get fired.
2. A Zune body bag with a built in chunk of charcoal pre-soaked in starter fluid. When users find out that they can’t actually use the beast they bought the way they want, they can at least feel good about destroying it.
Check out Cringley’s analyis of the Zune… he could be onto something:
http://www.pbs.org/cringely/pulpit/pulpit20060928.html
giggle. Sick of Apple fanboys, so hanging out with them. That could be called Latent Apple-ality. Do you fins yourself thinking a lot about us? Does the iPod make you so angry, you just can’t get it off your mind? Then, it’s probably true– you’re a big Po. Po-d lover, that is.
It’s ok. Just let it out. We’re all friends here.
Typo… I meant to say that Cringely might be ON something.
Can anyone tell me why the Zune has to be subsidized? The recent price break downs on the ipods shwo apple is making a profit between 20 to 40 % depending on who you talk to.
SO just curious, is this because its not their design? Because Toshiba designed and manufactured this?
Apple would get better pricing on components because they buy so many. Volume discounting. No one else really has that.
This guy says Apple is scared to the core of Zune!
<a ref=”http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9003718&source=rss_news10″>Apple scared of Zune?</a>
Oh Apple is scared of the Zune, oh they are so very scared. Who invited whom to the party? Do you remember? Jobs invited M$ to the party, right? Was Jobs stupid? Did he think that he’d lose to Microsoft? Well guys?
No Cringely is not on to something…
His equating music to TV doesn’t make sense. Zune is not about Google and ads. People have always bought music, as well as gotten it for free (radio). Same with TV recently (cable, versus over the air). People will pay for music. The proof is Apple’s iTunes success.
People like Cringely also need to get off this old MSFT and 3x success idea. That has been the case exactly once — Windows 3 (well, 3.1 or 3.11, really). xBox doesn’t really count (at 2x)because it is a major money loser. IE won, but is not a profitable piece of software. What, besides Windows, has been a 3x’s the charm winner? Nothing. The entire company rests largely on the profits of Windows and Office (its success was incremental, based on individual apps beating the competition).
You can pretend Zune is a smart short- or long-term move, but it is a disaster. The whole Zune versus PlaysForSure (hello MTV and URGE!) is a major f-up. MSFT says it will support both, but how are consumers or retailers going to figure this out? It’s like MSFT wants to make Apple even more successful.
Microsoft is lost in the wilderness right now, trying to find any “next” hit beyond Windows and Office. So far, for all its efforts, it has just seen a failure. Just look at MSFT stock. Read its financials. Note that all the cool new stuff is standards-based, not MSFT proprietary (XML, Web services, ODF, etc.).
Zune is a me-to attempt that has major implications for MSFT. Screwing your partners is never a good thing. Creating a product that relies on a feature — wireless — that won’t succeed for some time if ever is not clever.
BTW, Carl at Blackfriars is a very smart guy with quite an industry background (not just an analyst). If daveo has anywhere near his experience and knowledge, I will be impressed.
Ok, here’s the correct link about the very scard Apple:
This guy says Apple is scared to the core of Zune!
Apple scared of Zune?
The way Steve Ballmer abuses its partners is no different than the manner in which your father beat the shit out of your momma and she kept coming back for more…
It’s called codependency; an excessive emotional or psychological reliance on a partner, typically a partner who requires support due to an illness or addiction.
I’d be surprised if Steve Ballmer doesn’t step down (fired) late in 2007.
Microsoft cannot sustain these kinds of losses no matter how rich they think they are and more importantly the sting of ridicule and the embarrassing press that follows each product release chips away at Ballmer’s credibility.
The cheese stands alone…
Daveo is like an idiot savant. Without the amazing special skill.
Kreuzberg
I don’t have a personal opinion on this matter. I was refering to actual declared finacial resources.
Yes it is true that the sea is evaporating too but your backyard swiming pool regarless of size and design will not ocult the sea. Size matters and Microsoft has SIZE