“Wish you could have shorted the Microsoft Zune? The problem with shorting the Zune was that it was such a small piece of the Microsoft empire; its lack of sales was insignificant on the share price,” Jason Schwarz, chief options strategist for Lone Peak Asset Management, writes for SeekingAlpha.
“But now we have Zune part 2 coming at us in the form of the Palm Pre,” Schwarz writes. “Once again, a washed up company is trying to compete with Apple’s dominance; you know how the movie plays out. Only in the sequel, the washed up company isn’t diversified to ensure their survival. Unfortunately, Palm is a one-trick pony whose entire fortune relies on the success of the Pre.”
“For the Pre to achieve success, it needs to fill a void or it needs to offer superior performance vs. its competitors. Apple filled the digital music void with the iPod. Microsoft came along and tried to copy it with the Zune but it failed miserably because it wasn’t any better than the iPod. The critics loved the Zune just like they love the Pre but what the critics don’t understand is that consumers need a substantial reason to switch,” Schwarz writes. “It looks like history is about to repeat itself.”
Full article here.
[Thanks to MacDailyNews Reader “Fred Metrz” for the heads up.]