“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.
Related articles:
Analyst: Zune could lead to ‘civil war’ between Microsoft and Windows Media partners – September 29, 2006
In wake of Zune announcement, should ex-Microsoft ‘partners’ join iPod ecosystem? – July 27, 2006
Analyst: Microsoft partners zune to be the biggest losers – July 25, 2006
In wake of Zune, Microsoft ‘partners’ consider abandoning PlaysForSure – July 25, 2006
i don’t think jobs just cancelled out the clones…. he gave them a new price for the licenses… sure, they were much more expensive than what they were previously paying, but still, they had a choice.
and steve didn’t have a choice… apple was DYING. the former apple leaders (before steve’s return) made a terrible mistake of leasing out the company’s crown jewel for almost free. IDIOTIC… at that point apple couldn’t afford to do that. they weren’t Microsoft, who had no hardware R and D expenses to spend for. they were apple, whose R&D department was spending way more than industry standard, and they gave away the fruits of their labor for almost free… Steve was just correcting a dumb ass move, and he did it legally and within reason.
so, no, apple didn’t do the same thing to their partners. and apple had no choice, either.
microsoft just suckered these people in and kicked them out without warning
“”That’s a silly argument for why screwing them would be OK.”
No, it’s called survival of your business, and it’s simply stupid to keep doing something that’s losing you business.”
So now we’re to admitting that Steve screwed them royally, but had a good reason?
“Apple would never have agreed to Mac cloning if your assertion were true. Why would Apple have agreed to do such a thing? “
Because anyone with the most basic business education knows when you have a close substitute product, it will take sales that you could have made. Apple’s problem was that they couldn’t compete well with the cloners when it came to customers who valued price over an Apple sticker. They obviously felt they needed to kill them to get their monopoly on Mac OS systems back.
“The cloners failed to do this”
The cloners were quite happy, Their share was expanding quite nicely. Apple’s problem was that they made the mistake in thinking that there were more people who wanted Macs than there were. Instead there were just existing customers who were happy to buy less expensive hardware. It was Apple who pulled the plug.
“Steve was just correcting a dumb ass move, and he did it legally and within reason.”
By screwing the partners.
He did it legally. He may have even just been being pragmatic, sacrificing his partners interests for the betterment of Apple. That doesn’t mean it was an ethical or reasonable thing to do.
“microsoft just suckered these people in and kicked them out without warning”
Apple suckered those licensees in, then refused to keep licencing them a component that was essential to their continued business. They may have had their reasons. It may even have been a smart business move to get the monopoly back. But they still screwed their partners big time.
I don’t see Microsoft cancelling PlaysForSure licenses, or forcing the shutdown of those 3rd party music stores, or even telling people they can’t make and sell PlaysForSure devices.
Apple took action to make sure it’s clone partners had no choice but to go out of business.
In contrast, Microsoft is just choosing to compete with it’s parners. Apple’s actions were much worse.
If Steve offered you a license to build Mac clones today would you take it? Would you build a business around it? If you did would you just be waiting for the day when you got too successful and he cut off your oxygen supply? Given the history, would that come as a surprise when he did?
The Sunday evening Amazon MP3 player top sellers report:
13 Zune black
26 Zune brown
44 Zune white
For comparison, number 25 is the iPod shuffle … the last generation white one.
Like I said, this version of the Zune is dead. By next week, the top Zune will be out the top 25. All the Apple-haters will have bought their Zunes. Everyone else will keep buying iPods or Sansas or Zens.
To AppleScrewsPartners,
If Jobs didn’t end the licenses outright, the licenses would’ve ended anyway because Apple would’ve gone bankrupt quite soon. Apple was that close to death given that a new modern OS would not be ready for 2-3 more years. The cloners had to recognize that their success depended on Apple’s success, but they didn’t.
Now we may not recognize today that Microsoft’s future is at stake with the iPod’s dominance over MP3 players. And clearly MS is not near bankruptcy. But I believe MS recognizes that the iPod is a MAJOR future threat, and felt that time was of the essence, and thus felt they had to change course and thereby screw their partners. I don’t blame MS for doing it because they are right that the iPod is aiming to expand into video, cellular, PDA, wifi, remote control, and everything else you might want to do on a HANDHELD/ MOBILE pocketable device. MS recognizes that Apple is using the MS playbook. Once Windows was entrenched on the desktop, it became impossible to dislodge it even as it expanded into more and more markets. And now the iPod is becoming entrenched as a pocketable handheld device.
The fact that they did this now reveals the urgency they project. I disagree with their urgency; they could’ve waited out this Christmas instead of putting out a half-baked larger-than-iPod-pocketable product that uses a wifi not really suited to a handheld. It’s the same thing they did with Origami; they used technology that wasn’t really ready for the price point they needed to hit, and they weren’t sure what the real use case was for it. And it’s pretty much dead, and it will take a huge leap to win back people with another Origami version. In the same way, this version of Zune is dead.
“If Jobs didn’t end the licenses outright, the licenses would’ve ended anyway because Apple would’ve gone bankrupt quite soon. “
All you’re doing is coming up with reasons why you think it was OK for Apple to screw them.
“In the same way, this version of Zune is dead.”
In the same way that almost every V1 Microsoft product is underwhelming. But it will be purchased, and it will dent Apple’s sales a little bit (Lets face it every Zune Microsoft sells probably takes away one iPod sale). But in markets they perceive to be key, they have the money to keep on going until they succeed.
The real future device is the cellphone, not the iPod. Apple is miles away from having a platform like Windows Mobile. The iPod is currently a limited use device that most people would like to see merged into something else. Just as the PDA has all but disappeared as a standalone category, so too will the MP3 player.
As I said, Microsoft are not cancelling PlaysForSure licenses, or forcing the shutdown of those 3rd party music stores, or even telling people they can’t make and sell PlaysForSure devices.
“it will take a huge leap”
You can bet that the spec for the next Zune says something like “at least the same size disk as an iPod, no thicker than the equivalent iPod, no bigger than the iPod, no heavier than the iPod”.
And because iPods are basically Windows peripherals, and because the customer base seems completely willing to try non Apple products, Microsoft will succeed eventually.
They are several MS products that didn’t get any better in subsequent revisions, and didn’t gain much mindshare or market share…
1. WebTV
2. Tablet PC (software)
3. Portable Media Players (software)
4. PlaysforSure (software)
5. Microsoft Money
6. Even Xbox/Xbox 360 still trails the Playstation by a large margin
So don’t bank on version 3.
And next year, MS will need to be releasing an MS Zune cell phone to counter the huge popularity of the iPod phone, and thus, needing to screw their smartphone partners…
Just because I come up with a reason why Apple had to screw their partners doesn’t mean it’s wrong. You’ve got some logic problems.
And you think that if MS isn’t fully committed to fixing and enhancing PlaysforSure, that it still has a successful and prosperous future? Or that any of its partners think PlaysforSure has a future when it is not only competing against the iPod but against the Zune? Wow, what thought processes you have. Unlike your thinking, the truth is that PlaysforSure partners have already begun to jump ship, if you haven’t already read…
“Just because I come up with a reason why Apple had to screw their partners doesn’t mean it’s wrong. You’ve got some logic problems.”
At least we have established without doubt that Apple screwed it’s clone partners.
now we’re down to discussing the meaning of the word “Screw”
“Screw” by definition implies that it was Wrong for someone.
Methinks you have the logic problems, Your Apple Can’t do Wrong bits are stuck high.
Gosh, I love Sputnik fodder: “Microsoft’s former partners may cry foul over previous partnerships, but the real truth is these third-party vendors were abhorrently unsuccessful in advancing the PlaysForSure concept, a brilliant strategy by Microsoft that was unfortunately hampered by inept partners either unable or incapable of following Microsoft’s precise specifications. Microsoft in no way should be held responsible for the failures of these third parties.”
Microsoft is responsible of course, a brilliant strategy will only succeed if you have adept partners. MS of course was incapable of choosing an adept partner, say Apple to play for sure. MS talks the talk, Apple walks the walk, it’s simple. You can give guns to people over swords, but if you don’t teach them how to use the guns, the swords men will still rip them to shreds.
Microsoft’s precise specifications, that is a laugh and reminds me of the time we had to bring a tech over (took a week to figure it out) why a sophisticated “all Windows” computer did not work, not even in safe mode. It had a graphics tablet that had to be turned on for the computer to work. I looked incredulously at the tech and said “wow, you mean if someone sold me a car that would not run unless the radio was turned on I should buy it?” He was not amused.
You have to fill in the blanks Microsoft’s precise anal retentive, obtuse, convoluted inconsistent agains other standards specifications.
Duh
“You have to fill in the blanks Microsoft’s precise anal retentive, obtuse, convoluted inconsistent agains other standards specifications.”
So at the end of the day, Apple fucked it’s parners and fucked them good.