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. The Financial Times is a bit misleading when they say the Zune has “problems with the machines” – the limitations on wireless sharing and incompatibility with other music services are not “problems”, they’re “features” and work exactly as Microsoft designed them.

    It’s just a stupid design.

  2. “new versions of the player and more wireless facilities”

    So, more wireless cards? Right.

    The funny thing is that there are a couple of arguments the analysts use that are bullshit. One of them is also used against the iPod – “only works with one store”. Few give a fsck. As long as the store is good, the consumer doesn’t care. If you need to visit 5 download stores, then those stores are either niche services or poor mass market services. Why use 5 poor mass market services when you can use 1 good one, like iTunes?

    The differnce here: ease of use. Software integration (hell, fscking INSTALLATION) with hardware. Ease of assembling libraries. Integration with store. Clickwheel. For players with tons of media, the clickwheel is an absolute must have.

  3. Here is the real issue. Microsoft has painted itself into a corner by agreeing to be Universal Music’s bitch. Any cool new feature that could be implemented (wireless mostly) will mean the easier sharing of music. Now that the music industry knows that Microsoft will bend over and lift its skirt at the drop of a hat in its sheer desperation, the RIAA will absolutely hold the line on giving even an inch towards usability or flexibility. We all know how this story will end. If you don’t, go ask Clippy or Microsoft Bob.

  4. BustingTheSkullsOfIdiots gets it except for the “selling people what they don’t want” part.

    Zune is precisely what people want. It’s iPods that Apple is shoving down people’s throats with their restrictive DRM and clunky interface. iTunes doesn’t even work. Now that Saddam is off Jobs’ speed dial and Microsoft is blowing the iPod mess out of the water with their Zune Apple is in a real bind. Zune is democracy to iPod’s roadside bomb. How do you like that iPod lemmings? By using the iPod you are supporting the terrorists! Zune is clearly democratizing the MP3 player market from Apple’s reign of terror. Staying the course is paying off big time for Microsoft. Who is going to rise out the sectarian violence between Creative, Sandisk and Apple? None of the above. Microsoft’s democratically elected Zune will rise above them all. Give me Zune or give me death—and God bless Microsoft. Mission accomplished.

    Otherwise that’s a great post BustingTheSkullsOfIdiots! Keep it up.

    Welcome to the Social.

  5. With apologizes to wikipedia:

    Although appearing as deceptions to the Western public, the descriptions uttered by the <strike>Iraqi information minister</strike> Zune Tang reflected what <strike>Saddam Hussein</strike> Steve Ballmer and his inner circle believed, and were well received in parts of the <strike>Arab</strike> IT world most fiercely opposed to the <strike>war</strike> iPod.

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