“Who in his right mind would step into the ring against the iPod? Apple Computer’s sleek music-player, and its iTunes software and online store, dominate the digital-music industry as comprehensively as Microsoft’s Windows operating system dominates desktop computing. But just as Apple has tried for years to loosen Microsoft’s grip on computing, so Microsoft now hopes to loosen Apple’s hold on digital music. On November 14th, the software giant will launch Zune, a music-player that looks and works very much like an iPod,” The Economist reports.
The Economist reports, “Zune is unlikely ‘to make any dent at all in Apple’s market share,’ says Tim Bajarin of Creative Strategies, a consultancy in Silicon Valley. But Microsoft probably has no choice but to try, he adds. During its first 25 years, he says, Microsoft succeeded above all by bringing computer technology to businesses; to succeed in its next 25 years, it must turn its attention to consumer gadgets, for that is where the innovation and growth will be. But the formula with which Microsoft achieved its dominance in the first round appears not to be working in the second. So Zune is based on a very different business model-evidence that Microsoft is changing.”
“The Zune device does not work with other online stores, even those of Microsoft’s partners; and Zune Marketplace does not offer songs for non-Zune devices. Zune, in other words, is a proprietary bundle of hardware, software and service-exactly like Apple’s iPod-iTunes combination,” The Economist reports. “For Microsoft this amounts to an about-face shocking enough that Robbie Bach, the executive who runs the company’s entertainment division and who devised the strategy, goes out of his way to play down its importance.”
The Economist reports, “Microsoft has ditched the idea of providing enabling software to other firms in favour of Apple’s approach of doing everything itself. Its first move in this direction came with its Xbox games consoles, in which hardware, software and an online service are tightly coupled. (The Xbox division also reports to Mr Bach.) Zune is much more controversial, however, because Microsoft’s pre-existing hardware and service partners are left high and dry. ‘I’ve never seen a business so blatantly screw its business partners,’ says Peter Sealey, a professor at Berkeley’s Haas School of Business.”
Full article here.
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