Microsoft says Zune sales in line with their expectations

“Microsoft Corp. said initial sales of its Zune music player are in line with the company’s expectations amid reports of waning interest in the device that competes with Apple Computer Inc.’s iPod,” Dina Bass reports for Bloomberg News.

“Initial sales ‘indicate we are on track to meet our internal business projections,’ Zune Director Jason Reindorp said in an e-mailed statement. Microsoft has refused to disclose sales or projections,” Bass reports. “But a survey by Piper Jaffray & Cos. analyst Eugene Munster shows few retailers are recommending the device.”

Bass reports, “iPod, which has a 75 percent share of U.S. retail sales for such devices, is garnering more recommendations than a year ago, said Munster. Clerks recommended the iPod 75 percent of the time in the most recent survey, compared with 68 percent a year ago. Some clerks who spoke to Munster said they hadn’t even heard of the Zune even though the device was available at their stores.”

Full article here.
Microsoft certainly must have had low expectations. It looks more and more to us like the whole Zune fiasco was intended mainly to throw a monkey wrench into Apple’s next negotiations with the music labels than to be a viable product/service. If so, Microsoft is treating the few Zune customers they do have as pawns; that’s a pity, but it’s hardly surprising. Giving Universal Music a cut of device profits is a bad deal to which we don’t expect Steve Jobs to capitulate.

Related articles:
Universal CEO Morris wants iPod royalty fee from Apple – November 28, 2006
Microsoft’s Zune selling like snotcakes – November 15, 2006
Universal Music Group CEO calls iPod users thieves – November 11, 2006
Following Zune deal, Universal expected to demand iPod royalties from Apple – November 10, 2006
Microsoft to pay Universal for every Zune sold – November 09, 2006

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