Analysts: Microsoft needs to ‘rethink’ as interest in Zune fades fast

“The mixed early reception for its Zune music player means Microsoft will have to make early tweaks if it is to stand any chance of rattling Apple’s dominance of the digital music business, according to analysts,” The Financial Times (FT) reports. “That should mean announcements early in the New Year of new versions of the player and more wireless facilities, they said.”

“Initial sales in US stores put the Zune second to the iPod. The player accounted for 9 per cent of MP3 players sold in its first week, according to NPD, a market research group, compared to Apple’s 63 percent,” FT reports. “But there have been signs that early interest in the Zune has faded fast. On Amazon.com’s listing of most popular electronic products, considered one measure of broader demand, Zune on Friday morning stood at number 62. That was well below rival MP3 players from SanDisk and Creative.”

MacDailyNews Note: Please see related article from Blogging Stocks, “Microsoft’s Zune being outsold at Amazon — by picture frames.” (“Sales of Microsoft’s Zune digital music device [at] Amazon.com [are] trailing other hot gift items such as … record turntables and digital picture frames. Ouch, Microsoft.”)

FT continues, “The launch has also been beset by problems with the machines – from limitations on sharing music with other Zune owners wirelessly, to the incompatibility with other online music systems… Analysts said Microsoft should use the Consumer Electronics Show, in early January, to announce new wireless capabilities for the Zune, and launch a whole new version of the player by the spring.”

Full article here.
Who else smells blood?

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64 Comments

  1. While I am as anxious to “smell the blood” as most others probably are, I think the big question will be WHEN that actually happens…

    M$ (obviously) has lots of resources to burn with this one, and loads of time to develop a version 2 (or 3 or 4) before deciding if they may or may not kill it.

    I’m more worried about what effect that 3rd or 4th version is going to have on the marketplace.

    That being said – as long as Apple keeps the pressure on and keeps releasing great versions with new features, they won’t have anything to worry about…

    $0.02

  2. Give the people what they want for a damned change, M$!!!
    Listen to the masses and you just might be able to salvage some dignity and end up with a half decent product!
    Open up the Wi-Fi, stick by your “PlaysForSure” partners, clean up the design and see how much more competitively you’ll place!

    what a bunch of friggin maroons…..

  3. Microsoft will “stay the course” (not “cut and run.”) In other words, they will continue spending money on the Zune, talking about how great it is, and insisting that its fortunes will reverse “in the next few months.”

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