Microsoft begins uphill battle against iPod on Tuesday

Posted:
in General Discussion edited January 2014
Although it's seen as the most legitimate competitor to Apple Computer and the iPod+iTunes franchise thus far, Microsoft Corp., which launches its Zune digital media player and compatible music service on Tuesday, has its work cut out for it.



Priced at $249 with 30GB of storage, Zune will enter the market at relatively the same cost as one of Apple's video iPod models. Microsoft is betteing that some of the player's unique features will act as selling points, such as its built-in FM receiver and wireless sharing capabilities.



While an FM receiver is one of the most highly requested features for the iPod, one Wall Street analysts is skeptical that Zune's wireless capabilities will act as a catalyst to help spur sales of the bulkier, heavier iPod rival.



"If, at some point, there are millions of Zunes in the market, the wireless sharing capability may prove to be a more compelling feature," PiperJaffray analyst Gene Munster told clients on Monday. "We do not expect to see a material impact on iPod market share from the Zune over the next 2 quarters, unless Microsoft starts a massive marketing effort within the next few weeks."



For its part, Microsoft has vowed to spend hundreds of millions of dollars over the next several years to promote its Zune brand and close the gap on Apple's iPod. But as Munster told clients, expectations of any immediate results may be far fetched.



"Media and analyst coverage of Zune has been high, but we believe public awareness of Zune is still low at this point and would need to grow significantly in the coming weeks for Zune to have an impact on this holiday season," he said.



Munster said Microsoft plans to spend several years developing various other gadgets under the Zune brand, which likely translates into Apple having a clear runway to grow its iPod footprint and expand its own offerings before Microsoft has a real foundation in the space.







"Ultimately, it is possible that Microsoft will be better off for spending several years investing in this initiative, but unless Microsoft makes some inroads against Apple during the investment phase, it may prove to be too late to capture meaningful market share," he said.



Similarly, Munster is uncertain that Microsoft's emphasis on "community" features, such as wireless audio and video sharing, is optimal for driving growth in the digital media player market.



"We expect community features will become increasingly embedded in various services (and devices via wifi), including iTunes, but ultimately we believe that this is a device driven market and for Zune to be successful Microsoft must develop devices that capture customers from Apple," he said.
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Comments

  • Reply 1 of 152
    Holy Beefaroni!



    You can go to http://www.zune.net/ to see the dismal results of Microsoft's advertising efforts.



    The tagline: Welcome to the social - Yeah, that makes me want to buy it. Millions of dollars of advertising money and that is the best they can come up with. Reminds me of some crappy high school dance.



    The commercials: They look like some amateur attempts at YouTube videos, and ones which would be low ranked at the bottom of the pile at that. The videos totally lack any type of energy, the music is bad, it doesn't focus on the product enough. Just some boring, depressing, confusing, astroturfed home video garbage. Compare it to the new nano completely remixed ad or the original shuffle ad. The iPod ads make me want to dance, the Zune ads make me want to slit my wrists.
  • Reply 2 of 152
    Microsoft's first mistake was having the Zune in brown. People today want simple designs, and a good interference. The Zune hasn't got that. Also they have wireless in these things. If they keep the hard disk spinning, the Zune will be dead in 20 minutes. Frankly, the Zune is a dubbed iPod killer, like Creatives and etc's devices, that will land in the bin of less that 2% of the market. Microsoft is no way wise with their cash on this one.
  • Reply 3 of 152
    The Walmart near me already has them on display. I took my wife by them (she's a good neutral party; she doesn't quite share the Apple allegiance I do, but she's getting there), and the first thing she said was "Wow! Those are huge!"



    I asked her what the wheel was on the front, and she said it was probably a scroll wheel. when I told her it was only a directional pad, she thought that was stupid. She also wasn't too fond of the brown.



    So my wife, who might consider one if it was significantly cheaper than an iPod, dismissed it based on size, function, and style, almost immediately. The fact that is isn't significantly cheaper than an iPod means she probably wouldn't consider it (if her husband wasn't helping her, that is).



    Zune, FTL!!!!111one
  • Reply 4 of 152
    Great "market survey", Hohle...
  • Reply 5 of 152
    My favorite part of the Zune is how, exactly like the Xbox, they say they are 'losing money on every Zune sale', as if they are trying to make it seem like they are doing us a favor, and delivering us the product because they are trying to better the world with it or something.



    I'd be willing to bet they lose no money with the Zune, because they are probably still making 150 bucks off of the Zunes they sell. Even though, put next to the iPod, they have no chance in selling this first generation of Zunes. iPod is worldwide known as cool, and great products, were as the Zune isn't even known in the country it was made. Microsoft is going to have to bust out a couple billion in marketing, and catch the attention of kids these days in order to even get the brand known.



    Also, whats with the brown?! It looks so horrible. I wouldn't buy it for my worst enemy. With the brown it seems like they are trying to go with a 'retro record player with a tv in it' look, perhaps trying to get the eye of older generation?



    That would make sense. Microsoft is a known brand, and the upper age group of people (30+) will be more familiar with Microsoft then Apple.



    But in this case....branding Microsoft on this thing is just shooting themselves in the foot, as well as losing more then just 50 bucks on a Zune sale.



    Anyone know where the name Zune came from?
  • Reply 6 of 152
    Cool-
  • Reply 7 of 152
    the first thing i would do if i was micorsoft (besides making a better product) is to get apple corp on my side, especially if they are targeting older generations that love ugly brown colors. and they should release a "beatles" addition with like the "1" album preloaded and mcartney's signature or something on the back.



    ...i dunno...just a thought
  • Reply 8 of 152
    Cool - you can even get a Zune HiFi - I mean VAF.







    http://www.zune.net:80/en-us/accesso...r-octavio1.htm



    Seen something similar before:



    oh yes here it is:



    http://www.apple.com/ipodhifi/
  • Reply 9 of 152
    still cant get over that shit brown...
  • Reply 10 of 152
    Hang on aren't we missing a major point- Zune is not going to be Mac compatible- looks like Microsoft have made up our minds for us already! What a waste of space- it seems like a petty attempt at getting back at a more innovative idea than they have ever had. Shame on you Microsoft, your lack of ingenuity will be the death of you!
  • Reply 11 of 152
    -df-df Posts: 136member
    Bash!
  • Reply 12 of 152
    Quote:
    Originally Posted by ryan10ad


    Microsoft's first mistake was having the Zune in brown. People today want simple designs, and a good interference. The Zune hasn't got that. Also they have wireless in these things. If they keep the hard disk spinning, the Zune will be dead in 20 minutes. Frankly, the Zune is a dubbed iPod killer, like Creatives and etc's devices, that will land in the bin of less that 2% of the market. Microsoft is no way wise with their cash on this one.



    This first version of a Zune player is simply a trial balloon for Microsoft. They just want to see how the market reacts to it. Hell, it's just a rebranded Toshiba MP3 player; they've invested almost zero dollars in engineering for it.



    However, you can bet your sweet patootie that versions 2 and 3 of this will be much nicer, based on actual user feedback.



    So don't think that just because this first version is so horrible that Microsoft doesn't know what it's doing. It probably does, long term.
  • Reply 13 of 152
    eckingecking Posts: 1,588member
    I would argue that Creative's offerings are better than MS's and closer to real competition for apple but they lack the online presence, which obviously has been key.



    I just want MS to make apple sweat for a while so they offer more to us and then they can drop out of the race like dell.
  • Reply 14 of 152
    Quote:
    Originally Posted by AppleInsider


    "an FM receiver is one of the most highly requested features for the iPod"



    I have never heard or seen anyone listen to the radio with an iPod. I have never heard or seen anyone hear or see anyone think about listening to the radio with an iPod. But of course, I'm only one person.



    There is this ...

    http://store.apple.com/1-800-MY-APPL...nMore=MA070G/A
  • Reply 15 of 152
    Has anyone looked into what type of audio files this thing will play and the restrictions M$ has put on those file? Nobody is talking about it yet because it will be the most closed system out there. Buyers beware, the sh*t will hit the fan when the suckers that buy these things realized that they just bought chains and shackles.
  • Reply 16 of 152
    While most of you deride the fact that MS chose brown as one of the colours for the Zune, you aren't taking into account that it is, in fact, a colour which ranks high on colour forecasts.



    "Yeah, yeah", you say. "Brown, bwhahahaha."



    Really. People get paid big bucks to figure this stuff out. I wouldn't be surprised to see a Moss Green or an Orange one in the next 6 months - two other colours that are going to be in most designers colour stories over the next year or two.



    Microsoft are jumping on well after two other small electronics manufacturers, though: Nokia and Sony Ericsson. (Personally, I think the SE K790/K800 looks great in the 'Allure Brown'.)
  • Reply 17 of 152
    melgrossmelgross Posts: 33,028member
    Quote:
    Originally Posted by AjayBot


    My favorite part of the Zune is how, exactly like the Xbox, they say they are 'losing money on every Zune sale', as if they are trying to make it seem like they are doing us a favor, and delivering us the product because they are trying to better the world with it or something.



    I'd be willing to bet they lose no money with the Zune, because they are probably still making 150 bucks off of the Zunes they sell. Even though, put next to the iPod, they have no chance in selling this first generation of Zunes. iPod is worldwide known as cool, and great products, were as the Zune isn't even known in the country it was made. Microsoft is going to have to bust out a couple billion in marketing, and catch the attention of kids these days in order to even get the brand known.



    Also, whats with the brown?! It looks so horrible. I wouldn't buy it for my worst enemy. With the brown it seems like they are trying to go with a 'retro record player with a tv in it' look, perhaps trying to get the eye of older generation?



    That would make sense. Microsoft is a known brand, and the upper age group of people (30+) will be more familiar with Microsoft then Apple.



    But in this case....branding Microsoft on this thing is just shooting themselves in the foot, as well as losing more then just 50 bucks on a Zune sale.



    Anyone know where the name Zune came from?



    MS says that they won't be making any money on the Zune now. with the marketing dollars they are saying they will be putting into it, I'm sure they will be losing money.



    It's already estimated that they will be losing between $30 and $60 per player by iSupply. The fact that the original selling price was mistakenly leaked through an error by Amazon (I think it was), and was $289, shows that they needed to have a higher sell price to be profitable. They also said that Apple's $249 price for their 30GB iPod schocked them, and, no doubt, led to their lowered sell price



    The $1+ fee they are going to be paying to Universal won't help either.



    Interestingly enough, to speak against your thinking about MS as such a well known brand as being a good thing, it isn't anywhere to be found on the device..
  • Reply 18 of 152
    rickagrickag Posts: 1,626member
    When can we expect a lawsuit by Creative over the hierarchal menu?
  • Reply 19 of 152
    melgrossmelgross Posts: 33,028member
    Quote:
    Originally Posted by mbaynham


    still cant get over that shit brown...



    I lot of people have said they like it. Whether they will sell much of that color is something else though.
  • Reply 20 of 152
    melgrossmelgross Posts: 33,028member
    Quote:
    Originally Posted by ecking


    I would argue that Creative's offerings are better than MS's and closer to real competition for apple but they lack the online presence, which obviously has been key.



    I just want MS to make apple sweat for a while so they offer more to us and then they can drop out of the race like dell.



    Creative iusn't much compitition for Apple at all. They have 4.3% of the market. They are third, behind Sandisk with 9.7% marketshare.



    This is the latest number of players being sold. Marketshare of players already owned, and planned to be bought, are more interesting still:



    http://www.appleinsider.com/article.php?id=2105
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