Originally Posted by extremeskater
Well lets assume that number is correct isn't it interesting that they can just keep moving along. I believe as of July 2007 the number was really closer to 2 billion.
How is that "interesting"? It just means MS has enough money to throw at markets that they don't seem to compete very well in (by compete I mean "be profitable"). And to do so for a long time.
So MS will keep the Zune afloat for a long time, even if it means losing money on every unit sold. I don't know anyone who expected otherwise.
That's not really the same as competing. Competing, in the MP3 market, means you build compelling products that give people a clear reason to choose them over the entrenched incumbent. You have to do better than "OK" or "pretty much the same at the price point", because an entrenched incumbent has too much market inertia for customers to just wander off without strong motivation.
Slightly larger screens, odd colors and WiFi syncing (and what's that going to do to the battery life of a flash sized player?) aren't enough. WiFi syncing, in particular, really strikes me like one of those typical MS bullet-point features, that sounds a lot better on paper than it actually is. And, anyway, if "more features" were the magic ingredient that won over iPod users, the market would have long since made that clear. Obviously, that is not the case, and it's one of those things that the corporate culture at MS will never, ever understand.
Now, given time, I'm sure MS can find ways to improve the Zune line. But Apple's not standing still, and by the time that happens, Apple will have taken the iPod lineup somewhere else. For instance, it looks like the new Zune flash models compete pretty well, in terms of design, with the Mini of several generations ago. What do you think Apple will be making by the time MS makes something that competes head on with the second generation Nano?
If, as you say, the MP3 player paradigm is exhausted, with nothing of significance to be done, how does that improve MS's chances of grabbing market share? If true, all that means is that the market is heading toward being completely commodified, where price and price alone is the differentiator.
Apple knows how to stay ahead of that curve with striking design and its "whole widget" strategy. Does MS?