Apple is killing MS by stitching together peripherals like iPods, iPhones, MM and the Mac together. If MS abandon Zune they only re-enforce the growing opinion that Windows and MS is only relevant for 'work' (x-box notwithstanding). They're beginning to get marginalized.
With declining profits, and slowing sales, MS is already in trouble with the investment community. Windows sales were down this quarter, the quarter where they pick up. They are losing much money in their entertinment division. How long can that continue to happen?
If MS sells half as many Zunes this year than last, in which the estimates were that they sold slightly less than the first year, despite having a line of devices, rather than just one, what should they do?
At the end of the first year of sales, Ballmer was asked why they only had about 3.4% of the market. His reply was that they were only competing with the highest priced HDD models, and that next year, they would have a line that competed with Apple's most popular models, the Nano's.
Well, they had that year of sales with their expanded line, and where has it gone? Down! And that was before this disastrous quarter.
With less than a million sold the first year, and over $100 million on ads, that was over $100 they spent to sell each player! Almost as bad this year, as they spent less on ads, but sold less players. How long can a company keep that up?
At what point to you do what others are telling you to do, which is to get out of businesses where you don't understand the markets, and are doing poorly?
They just sold their last shares of Comcast, so they can see that some areas are beyond their understanding. This is too.
MS is a company for business. When it comes to the consumer, (except for consumers buying computers they use at the office (because they get free software for one reason)), MS doesn't understand the market.
If the Xbox wasn't so heavily subsidized for all these years, it would have disappeared as well.
The numbers are that they will be firing 1,400 people from their entertainment division. Where will they come from?
Some are already gone from the games area. No more Flight Simulator, for a start, and others are going as well.
That leaves 1,378 left. Now what?
The Xbox is much more important to MS's future than is the Zune ecosystem. But, we'll see.
They suffered losses with the x-box for years, why not stick out the Zune a little longer?
I believe they will do. As I mentioned earlier in the thread, I don't believe the Zune is meant as a standalone product, per-se. I believe the Zune is an extension of Windows Media Server, and the XBOX 360 as a media client, much as iTunes is a media server, the Apple TV is a media extender, and the iPod is the portable device in the chain. Microsoft has to stick it out in order for this family of devices to make it (although the XBOX could stand on its own if need be).
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Originally Posted by Johnny Mozzarella
Kill the Zune brand and build on the successful XBOX brand.
Again, the Zune is part of the XBOX brand. Microsoft is just doing a poor job of marketing it as such (in the same way that Apple is failing at advertising the Apple TV as part of its media trio).
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Originally Posted by melgross
Well, they are products for different people. The Shuffle is far more elegant, and attractive, while the Sandisk looks and feels cheap, but has more features.
I don't know that it feels all that cheap, to be honest.
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Subscription sites are not a feature so much. Very few people, as a percentage of those using mobile music, use them.
I'm one of them (its part of why I bought a couple of Sandisk players). Frankly, I love the idea of all-you-can-eat music.
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While there are some who rail about how much they hate iTunes, there are now over, according to Apple's numbers, and estimates from those in the industry, 350 million people using iTunes to manage their music and videos, even if there are only slightly over 75 million actually having an account, and buying.
I don't get those who hate iTunes. Granted, I was reluctant (at first) to allow iTunes to manage my music. I preferred the idea of creating folder hierarchies myself. Once I gave in, I realised that I just can't be bothered. I'd rather just dump it all into iTunes and let its database features manage my music.
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Well, I hope he's not going to one of those who MS will be firing shortly.
I think Microsoft has room for those who excel. If they do kill off the Zune, I'm sure he'll find a place. Thanks though -- I also hope he's okay
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Yeah. I just loved it when shortly after MS came out with the first Zune, Ballmer said that his kid wanted an iPod, but couldn't have one.
I thought that was hilarious too. I remember when Microsoft was reportedly discouraging the use of iPods on their campus (this was well before the release of the Zune). Honestly, the only people I see with Zunes are employees. I used to take the 253 bus that runs by Microsoft; it was full of Zune-carrying employees.
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Silly, right?
I definitely think so. Some people just want to be different for the sake of being different. I almost feel hypocritical, but I don't believe my love for the Mac is simply because it's not Windows--it's because I want a computer that just works (as evidenced by the fact that I am the only one in my department who has not had to deal with a single computer outage in the past three years, while all of my team has at least one blue screen every few months, and two outages per year requiring service).
They suffered losses with the x-box for years, why not stick out the Zune a little longer?
They need to take the DRM out of the Zune marketplace. That is simply unacceptable now that the iTunes store and Amazon no longer have it.
I MS should devote energy into making the Zune software better than iTunes, at least on the windows platform. Maybe it already is. iTunes on Windows supposedly isn't very good. This is an opening MS should exploit. There is a huge Windows install base that they should be able to tap into.
If they abandon Zune they only make it harder to re-enter that market later. They've already abandoned Plays for Sure. Can they afford to do it again?
MS advertises to their "partners" that they work with them, and help give them what they want. What they want is DRM, among other things.
What will sticking with the Zune, with great losses and rapidly dropping sales, do for them?
Don't forget that there's a very big difference between the music player market, and the game console market.
While you can lock up a new album, or some other music for a while, that's all you can do, all the content is available to all other companies. No one has been able to get all the licenses that Apple has though, because they have been at this the longest, and have the most sales. So there is nothing to distinguish the Zune positively from the iPod line.
But with consoles, you can have exclusive games. Thats what makes one console better than another. If you lock up a major franchise, you will sell a lot of consoles. This is what MS did with the XBox, and more so with the 360.
I am surprised that iPod has only 71% of the market. I just don't see 29% of people listening to music on something other than an iPod. I teach in a community college and the students I see are virtually all using an iPod for music. At my gym over the last year or so I see the occasional portable CD player, one Zune, a couple of Walkmen, and the odd "other" once in a blue moon. Nowhere near a third of the market. Where are all these people not using iPods? Third world perhaps?
I think outside of US iPod is a bit less popular (though still absolutely dominant). I've been seeing Creatives, Sony devices, a few Philips, Sandisk players here in NZ and I think Asia in particular is strong on alternative brands (Japan, Taiwan, South Korea... heck, China with their copies).
I believe they will do. As I mentioned earlier in the thread, I don't believe the Zune is meant as a standalone product, per-se. I believe the Zune is an extension of Windows Media Server, and the XBOX 360 as a media client, much as iTunes is a media server, the Apple TV is a media extender, and the iPod is the portable device in the chain. Microsoft has to stick it out in order for this family of devices to make it (although the XBOX could stand on its own if need be).
It still has to make money. If sales keep dropping, what's the point? Where do they say enough is enough? They may sell less than 500,000 units this year. What if the mindshare is lost, and they sell 300,000? What if they sell 200,000? Where does it stop?
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Again, the Zune is part of the XBOX brand. Microsoft is just doing a poor job of marketing it as such (in the same way that Apple is failing at advertising the Apple TV as part of its media trio).
It's more than marketing. It's a product that offers nothing more than the market leader to most people. Marketing can't change that. There's just no reason for most people to buy a Zune.
MS has now spent over $175 million on marketing the Zune ecology. Apple has spent how much in marketing the aTv? Almost nothing.
Yet, the Zune sale are way down from almost nothing to begin with, while the aTv sales were up 300%over last year, according to the last conference call, and Apple is still calling it a "hobby", while for MS, the Zune is a major product area.
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I don't know that it feels all that cheap, to be honest.
Hold it in your hand along with a Shuffle. You'll see.
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I'm one of them (its part of why I bought a couple of Sandisk players). Frankly, I love the idea of all-you-can-eat music.
Ok, I didn't say that NO one likes it. but what happens when you decide to stop paying?
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I don't get those who hate iTunes. Granted, I was reluctant (at first) to allow iTunes to manage my music. I preferred the idea of creating folder hierarchies myself. Once I gave in, I realised that I just can't be bothered. I'd rather just dump it all into iTunes and let its database features manage my music.
You can also organize it yourself, so people cant say that they have no control.
But there are those who must diss the product. It's in their narure.
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I think Microsoft has room for those who excel. If they do kill off the Zune, I'm sure he'll find a place. Thanks though -- I also hope he's okay
I'm sure they do. But companies are funny that way. In times like this they just lay off departments, and don't always look at WHO they are firing.
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I thought that was hilarious too. I remember when Microsoft was reportedly discouraging the use of iPods on their campus (this was well before the release of the Zune). Honestly, the only people I see with Zunes are employees. I used to take the 253 bus that runs by Microsoft; it was full of Zune-carrying employees.
I've seen a few here in NYC, but just a few. A couple of my daughters friends bought one, and kept saying how great it was—until they dumped it and bought another iPod.
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I definitely think so. Some people just want to be different for the sake of being different. I almost feel hypocritical, but I don't believe my love for the Mac is simply because it's not Windows--it's because I want a computer that just works (as evidenced by the fact that I am the only one in my department who has not had to deal with a single computer outage in the past three years, while all of my team has at least one blue screen every few months, and two outages per year requiring service).
It's funny, it used to be different when you bought an Apple product. Now it's buying an MS product!
MS advertises to their "partners" that they work with them, and help give them what they want. What they want is DRM, among other things.
What will sticking with the Zune, with great losses and rapidly dropping sales, do for them?
Don't forget that there's a very big difference between the music player market, and the game console market.
While you can lock up a new album, or some other music for a while, that's all you can do, all the content is available to all other companies. No one has been able to get all the licenses that Apple has though, because they have been at this the longest, and have the most sales. So there is nothing to distinguish the Zune positively from the iPod line.
But with consoles, you can have exclusive games. Thats what makes one console better than another. If you lock up a major franchise, you will sell a lot of consoles. This is what MS did with the XBox, and more so with the 360.
If you pays your money, you gets the best games.
I hate to be in the uncomfortable position of defending MS. Its not a lot of fun.
They've made plenty of mistakes and after 2 years have little to show in the portable music player market. But as a said before and you alluded to, they are get marginalized as only necessary for 'work'. That could be disastrous in the long run. Apple are eating away at them there as well. Google docs and Apple's cloud version of iWork may continue to eat away at MS dominance in that area.
I'm admittedly short on solutions for MS. But Apple was under much more difficult circumstances 10 years ago and look where they are today. It not impossible for MS to gain market share and mindshare in the consumer/lifestyle area. They still have a large base of users. But they need to get focused and fast.
I'm not surprised at this because the "ecosystem" for iPods is so gigantic that in terms of third-party accessories, nothing even comes close to matching its success (I believe Apple owns over 7 out of 10 portable music players sold worldwide). Apple got there first with the iTunes Music Store, and its patented "click wheel" interface ensures that they will continue to be easy to use for its non-touchscreen models.
Indeed, an entirely new discussion show format--podcasts--arrived because Apple created this ability with the iPod's podcast support.
Because Apple has such a command marketshare, they will continue to dominate the market for portable media players even in today's down economy. I'm surprised that a third-party developer did not create a program that would function akin to an iTunes but supports all non-iPod players so can do the highly-integrated media management for a Creative, Samsung, SanDisk SANSA, Sony, etc. player like iTunes does with an iPod.
I'm not strong with portable music (occasionally using PSP for portable audio/video when I can't drag my laptop) but my friend's Creative Zen comes with iTunes-like software. Doesn't look as nice but I think it does have most of functionality (just had a glance).
Also, Windows Media Player, WinAMP... maybe others?... should be capable to synch with number of players, manage album art and other jungles & bells. Again - not sure how deep does it go, but some functionality (outside of iTunes/iPod domain) does exist.
The fact that the Zune is STILL Windows only can't be helping them either. Microsoft's head is stuck in the sand not realising that so many people are using Macs now, especially people who use mp3 players. Terrible thinking on Microsoft's part!
And you reckon any Mac user would purchase MS audio player..?
Think again, sir
Bad as it already is, Mac compatibility for Zune would probably be one of the most useless and pointless exercises ever done in mankind history.
I hate to be in the uncomfortable position of defending MS. Its not a lot of fun.
They've made plenty of mistakes and after 2 years have little to show in the portable music player market. But as a said before and you alluded to, they are get marginalized as only necessary for 'work'. That could be disastrous in the long run. Apple are eating away at them there as well. Google docs and Apple's cloud version of iWork may continue to eat away at MS dominance in that area.
I'm admittedly short on solutions for MS. But Apple was under much more difficult circumstances 10 years ago and look where they are today. It not impossible for MS to gain market share and mindshare in the consumer/lifestyle area. They still have a large base of users. But they need to get focused and fast.
You can feel better, you didn't actually defend them.
I'm not the only person that says they should stick to what they know. Numerous people in the industry are saying that, and have been saying that.
Why do they have to part of the consumer space? They don't!
If they worked on business, they would do a better job there, rather than jumping all over the pace.
Look at the disaster it would have been for them to have acquired Yahoo!
I was really hoping they would get it for the ~$40 billion they were finally offering. What a mess that would have been!
They would have been at least $20 billion in debt from it, adding to their billions they are in long term debt already. They would see employees from Yahoo leave, as some had already left. They would have to spend billions more integrating both companies. It would distract them for years.
Then they would have had to write off tens of billions of the purchase as AMD is doing from their purchase of ATI, but on a smaller scale.
And the best part of it is that neither company has any idea what to do to stop the bloodletting of their marketshare. By the time everything was in place, their total marketshare would have been much lower that was Yahoo's when they started working on the deal.
Boy, did they get lucky!
This is typical of them. They must understand that there are areas in which they do poorly, and must get out of.
Just a short story (a true story): One night a group of my friends and I went out to dinner. One of my friends suggested that we should take the bill and split it 7 ways, for the number of the group, and it would come out cheaper in the end. We all agreed. I ordered what I normally ate and so did everyone but the friend who suggested splitting the bill. I looked across the table and he is eating Filet Mignon and Lobster. We all had beef tips or some such. The same as he normally has. To make a long story shorter, my portion of the bill was higher that night as I paid for his dinner splurge. End of story.
The subscription model has always reminded me of this night. It is great for a few people who amass massive music libraries at the expense of those who don't. Every time I see it advocated it is usually accompanied by a statement like:
It never fails to invoke images of my friend cramming steak and lobster in his mouth, laughing and having a good time, all at my expense.
I'm sorry, but this example really fails because it fails to distinguish limited physical resources vs. much less limited digital resources. If it's not to your advantage, you don't have to subscribe. In your silly example, you could have stood up for yourself and had a separate check, but failed to do so when it's obvious that the deal was changed afterwards. The incremental cost is there in your example and does affect you, but it doesn't even apply to this situation, the incremental cost of adding another album to your playlist is nothing. The cost of buying cable service and watching one night a month or thirty nights a month is the same. The cost of internet service is the same whether you just use it for email and a few web pages a day or download hundreds of gigabytes a month is the same, at least in my country. But do that with music, and that's just going too far? That's silly.
It still has to make money. If sales keep dropping, what's the point? Where do they say enough is enough? They may sell less than 500,000 units this year. What if the mindshare is lost, and they sell 300,000? What if they sell 200,000? Where does it stop?
Not necessarily. Remember when Netscape was a paid product? Microsoft lost money on I.E. to gain marketshare, presumably for the purpose of getting more IIS servers out there and, eventually, more developers coding ActiveX crap that doesn't work on any other browser. It worked. There are plenty of sites (albeit, thankfully, fewer and fewer) including a lot of internal corporate Intranet sites that only work with I.E.
If Microsoft can show that there is some relationship between the sales of Zunes, XBOXes, and Windows Media Center PCs, then they can keep losing money. For a little while longer anyway
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Ok, I didn't say that NO one likes it. but what happens when you decide to stop paying?
Unfortunately I have to give in to your point, because I already have stopped paying. Not because I didn't like the service, I just got to the point where I had to cut back in some expenses. During the years I had a paid Rhapsody account, I was able to download and listen to music I probably wouldn't have chosen to buy. Some of what I listened to, I did eventually buy. The rest I can no longer listen to.
Once upon a time, that was the case. Unfortunately, I think the new (tilt-wheel) mice are awful. The wheels are now way too stiff to push, and sliding back and forth is far less effective (in my opinion) than scrolling back-and-forth with the ball in the Mighty Mouse. Yes, the ball does need maintenance, but I find cleaning it with an alcohol swab every 2-4 weeks takes very little time.
I do (sometimes) miss the thumb buttons on the older intellimouse, but the new designs are horrible.
In that case, I'd recommend the Logitech MX400, which you can use on current iMacs and Mac Pros. It has the thumb buttons on the side and the scroll wheel has a nice "feel" even when doing left-right tilt wheel scrolling. I myself recently switched to the Microsoft Natural Wireless Laser Mouse 6000, which has a really nice feel in my hand (but does have that MS tilt wheel scroll wheel that does take some getting used to).
Not necessarily. Remember when Netscape was a paid product? Microsoft lost money on I.E. to gain marketshare, presumably for the purpose of getting more IIS servers out there and, eventually, more developers coding ActiveX crap that doesn't work on any other browser. It worked. There are plenty of sites (albeit, thankfully, fewer and fewer) including a lot of internal corporate Intranet sites that only work with I.E.
If Microsoft can show that there is some relationship between the sales of Zunes, XBOXes, and Windows Media Center PCs, then they can keep losing money. For a little while longer anyway
I don't believe that model can work here.
There is a big difference between software and hardware. While after the development costs are over, the software can cost nothing to distribute, the hardware will always cost a fair amount. So while MS could afford to develop IE and give it away, they couldn't afford to continue developing and building Zunes, and give them away. The razor, shaver model doesn't apply, because not enough money is being made on the music to pay for the players.
There would have to be tight evidence to show that selling Zunes at a terrible loss, which could amount to several hundred million a year between advertising costs, hardware and software development costs, and the even higher costs of the, now free, product, is responsible for furthering the sales of those other products for MS, not the hardware makers. As about all Windows versions are, or will be media versions to begin with, Zunes don't enter into the sale of those OS's. MS could still do this by supporting other manufacturers players. SanDisk, for example. Or, now that the songs on iTunes have no DRM, they could be supported. This, without the vast losses associated with having to give away players that otherwise no one wants.
Surely, you are not saying that declining sales of the Zunes would be tolerated because of some assumed tie-in to those other products, which were selling before the Zune came put? Then what would the Zune be contributing to those sales? It seems to me that it would just drag them down.
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Unfortunately I have to give in to your point, because I already have stopped paying. Not because I didn't like the service, I just got to the point where I had to cut back in some expenses. During the years I had a paid Rhapsody account, I was able to download and listen to music I probably wouldn't have chosen to buy. Some of what I listened to, I did eventually buy. The rest I can no longer listen to.
In that case, I'd recommend the Logitech MX400, which you can use on current iMacs and Mac Pros. It has the thumb buttons on the side and the scroll wheel has a nice "feel" even when doing left-right tilt wheel scrolling. I myself recently switched to the Microsoft Natural Wireless Laser Mouse 6000, which has a really nice feel in my hand (but does have that MS tilt wheel scroll wheel that does take some getting used to).
Just had a quick look, and while it does look nice, I still find the 360º scroll ball to be far superior to the 4-way tilt wheel. It's not simply a matter of what I'm used to--I had a Wireless Intellimouse with tilt wheel for about six months before I bought the Mighty Mouse. I never found the tilt to be of any use, and again, the technology that Microsoft uses for the tilt makes the wheel much stiffer to push. Cudos to Logitech if they've managed to soften that up a bit, but I still prefer the ball -- even though it does require far more maintenance than the wheels ever did.
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Originally Posted by melgross
I don't believe that model can work here.
Surely, you are not saying that declining sales of the Zunes would be tolerated because of some assumed tie-in to those other products, which were selling before the Zune came put? Then what would the Zune be contributing to those sales? It seems to me that it would just drag them down.
Your point is well taken, however, I always felt that that the Zune was never really meant to take (much) marketshare from the iPod. Rather, it was developed to taken on Apple (and others) in the home media pc arena.
I wasn't aware that MTV had ended its alliance with Microsoft until someone mentioned the fact elsewhere in this thread. I don't know if that was a major blow to Microsoft's attempt to take on Apple, or not. Most likely it was MTV being rather unimpressed that out of the 37 Zune owners, only twelve of them had signed up for the service
Well for starters the Microsoft mice are a lot nicer than the Apple ones.
They *used* to be better. The MS mice are crap these days. I stick to Logitech, personally. The Apple mice are like the iPod headphones. Straight into the trash.
Microsoft's Zune hit the ground even harder in its third holiday quarter. After two years of annual sales that barely reached the million unit mark, the company reported a major new drop in device sales for the winter quarter.
Microsoft's latest 10-Q filing stated that "Zune platform revenue decreased $100 million or 54% reflecting a decrease in device sales." The music player's sharp decline in revenues helped erase 60% of the company's earnings in its Entertainment and Devices Division, which includes the Xbox gaming platform.
Apple's iPod business, once feared to be at a dead end with satiated demand, hit a new quarterly unit record with sales of 22.7 million units. That's just 3% higher than the company's sales in the year ago quarter, but demonstrates a demand for innovative products even in the midst of difficult economic times.
Apple's record iPod sales don't include the iPhone, which Apple has referred to as its "best iPod yet." With iPhone sales, Apple sold over 27 million mobile devices last quarter, and over 208 million in total since it began selling the iPod.
Key to Apple's success has been its efforts to remain differentiated with unique features while also staying familiar and easy to use with the company's iTunes software. Microsoft's Zune debuted with some unique features, but the company's software churned as MTV pulled its URGE store from Windows Media Player, forcing the company to ship an entirely new, unfamiliar, and not quite functional Zune 2.0 desktop app.
Last year, Microsoft released a new software update but no significant new hardware refresh, leaving the tarnished brand without anything new to sell just as Apple continued to redefine its iPod line with a revamped, Internet browsing iPod touch. A rumored Zune partnership with Nokia also failed to materialize.
Apple's strength in digital media sales within iTunes also helped to keep the iPod in the leadership position among music players, holding on to 71% market share. Growth in iPod touch sales was particularly fueled by its new designation as a handheld gaming platform, leveraging the support the iPhone Apps Store has received from developers.
Haha, stupid Zune. Doesn't help that you can't use them on Mac's. What an idiotic way of thinking. Why should the consumer give a crap about OS. They just want to play music. Cutting out Apple consumers is just S.T.U.P.I.D and Zune deserves to crash and burn.
Your point is well taken, however, I always felt that that the Zune was never really meant to take (much) marketshare from the iPod. Rather, it was developed to taken on Apple (and others) in the home media pc arena.
I wasn't aware that MTV had ended its alliance with Microsoft until someone mentioned the fact elsewhere in this thread. I don't know if that was a major blow to Microsoft's attempt to take on Apple, or not. Most likely it was MTV being rather unimpressed that out of the 37 Zune owners, only twelve of them had signed up for the service
Oh, I think that MS, at least Ballmer, intended it to take marketshare away. That was the whole point to it. Otherwise, why bother?
When PlayforSure failed to gain any traction, which was also intended to take marketshare away (indeed, Ballmer stated that it would overwhelm iTunes), MS decided to try copying Apple. There's no doubt, from Ballmer's statements that this was thought to be MS's great weapon in the "music wars". But it also failed. All it's assumed to have done was to take perhaps a fraction 1% of Apple's marketshare, while the rest came from MS's own "partners".
Not too useful. All this accomplishes, is to re-enforce the idea that MS is a bad partner. They've done this kind of thing many times over the years. This is why, despite the strong support for DRM that MS has shown, content companies are even more wary of them, then they are of Apple.
I think that if somehow, MS had gained, say, 15% marketshare, they could claim success. A strong number two, with at least some possibilities of moving up even further over time would have been very good. But it's really been an abject failure.
When a company the size and muscle of a MS fails to make the slightest dent, that's really bad. They should learn something from that instead of pouring more money down the hole.
Now, with economic conditions being what they are, they will have to re-evaluate their strategies.
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I think this would be disastrous for MS.
Apple is killing MS by stitching together peripherals like iPods, iPhones, MM and the Mac together. If MS abandon Zune they only re-enforce the growing opinion that Windows and MS is only relevant for 'work' (x-box notwithstanding). They're beginning to get marginalized.
With declining profits, and slowing sales, MS is already in trouble with the investment community. Windows sales were down this quarter, the quarter where they pick up. They are losing much money in their entertinment division. How long can that continue to happen?
If MS sells half as many Zunes this year than last, in which the estimates were that they sold slightly less than the first year, despite having a line of devices, rather than just one, what should they do?
At the end of the first year of sales, Ballmer was asked why they only had about 3.4% of the market. His reply was that they were only competing with the highest priced HDD models, and that next year, they would have a line that competed with Apple's most popular models, the Nano's.
Well, they had that year of sales with their expanded line, and where has it gone? Down! And that was before this disastrous quarter.
With less than a million sold the first year, and over $100 million on ads, that was over $100 they spent to sell each player! Almost as bad this year, as they spent less on ads, but sold less players. How long can a company keep that up?
At what point to you do what others are telling you to do, which is to get out of businesses where you don't understand the markets, and are doing poorly?
They just sold their last shares of Comcast, so they can see that some areas are beyond their understanding. This is too.
MS is a company for business. When it comes to the consumer, (except for consumers buying computers they use at the office (because they get free software for one reason)), MS doesn't understand the market.
If the Xbox wasn't so heavily subsidized for all these years, it would have disappeared as well.
The numbers are that they will be firing 1,400 people from their entertainment division. Where will they come from?
Some are already gone from the games area. No more Flight Simulator, for a start, and others are going as well.
That leaves 1,378 left. Now what?
The Xbox is much more important to MS's future than is the Zune ecosystem. But, we'll see.
They suffered losses with the x-box for years, why not stick out the Zune a little longer?
I believe they will do. As I mentioned earlier in the thread, I don't believe the Zune is meant as a standalone product, per-se. I believe the Zune is an extension of Windows Media Server, and the XBOX 360 as a media client, much as iTunes is a media server, the Apple TV is a media extender, and the iPod is the portable device in the chain. Microsoft has to stick it out in order for this family of devices to make it (although the XBOX could stand on its own if need be).
Kill the Zune brand and build on the successful XBOX brand.
Again, the Zune is part of the XBOX brand. Microsoft is just doing a poor job of marketing it as such (in the same way that Apple is failing at advertising the Apple TV as part of its media trio).
Well, they are products for different people. The Shuffle is far more elegant, and attractive, while the Sandisk looks and feels cheap, but has more features.
I don't know that it feels all that cheap, to be honest.
Subscription sites are not a feature so much. Very few people, as a percentage of those using mobile music, use them.
I'm one of them (its part of why I bought a couple of Sandisk players). Frankly, I love the idea of all-you-can-eat music.
While there are some who rail about how much they hate iTunes, there are now over, according to Apple's numbers, and estimates from those in the industry, 350 million people using iTunes to manage their music and videos, even if there are only slightly over 75 million actually having an account, and buying.
I don't get those who hate iTunes. Granted, I was reluctant (at first) to allow iTunes to manage my music. I preferred the idea of creating folder hierarchies myself. Once I gave in, I realised that I just can't be bothered. I'd rather just dump it all into iTunes and let its database features manage my music.
Well, I hope he's not going to one of those who MS will be firing shortly.
I think Microsoft has room for those who excel. If they do kill off the Zune, I'm sure he'll find a place. Thanks though -- I also hope he's okay
Yeah. I just loved it when shortly after MS came out with the first Zune, Ballmer said that his kid wanted an iPod, but couldn't have one.
I thought that was hilarious too. I remember when Microsoft was reportedly discouraging the use of iPods on their campus (this was well before the release of the Zune). Honestly, the only people I see with Zunes are employees. I used to take the 253 bus that runs by Microsoft; it was full of Zune-carrying employees.
Silly, right?
I definitely think so. Some people just want to be different for the sake of being different. I almost feel hypocritical, but I don't believe my love for the Mac is simply because it's not Windows--it's because I want a computer that just works (as evidenced by the fact that I am the only one in my department who has not had to deal with a single computer outage in the past three years, while all of my team has at least one blue screen every few months, and two outages per year requiring service).
They suffered losses with the x-box for years, why not stick out the Zune a little longer?
They need to take the DRM out of the Zune marketplace. That is simply unacceptable now that the iTunes store and Amazon no longer have it.
I MS should devote energy into making the Zune software better than iTunes, at least on the windows platform. Maybe it already is. iTunes on Windows supposedly isn't very good. This is an opening MS should exploit. There is a huge Windows install base that they should be able to tap into.
If they abandon Zune they only make it harder to re-enter that market later. They've already abandoned Plays for Sure. Can they afford to do it again?
MS advertises to their "partners" that they work with them, and help give them what they want. What they want is DRM, among other things.
What will sticking with the Zune, with great losses and rapidly dropping sales, do for them?
Don't forget that there's a very big difference between the music player market, and the game console market.
While you can lock up a new album, or some other music for a while, that's all you can do, all the content is available to all other companies. No one has been able to get all the licenses that Apple has though, because they have been at this the longest, and have the most sales. So there is nothing to distinguish the Zune positively from the iPod line.
But with consoles, you can have exclusive games. Thats what makes one console better than another. If you lock up a major franchise, you will sell a lot of consoles. This is what MS did with the XBox, and more so with the 360.
If you pays your money, you gets the best games.
I am surprised that iPod has only 71% of the market. I just don't see 29% of people listening to music on something other than an iPod. I teach in a community college and the students I see are virtually all using an iPod for music. At my gym over the last year or so I see the occasional portable CD player, one Zune, a couple of Walkmen, and the odd "other" once in a blue moon. Nowhere near a third of the market. Where are all these people not using iPods? Third world perhaps?
I think outside of US iPod is a bit less popular (though still absolutely dominant). I've been seeing Creatives, Sony devices, a few Philips, Sandisk players here in NZ and I think Asia in particular is strong on alternative brands (Japan, Taiwan, South Korea... heck, China with their copies).
I believe they will do. As I mentioned earlier in the thread, I don't believe the Zune is meant as a standalone product, per-se. I believe the Zune is an extension of Windows Media Server, and the XBOX 360 as a media client, much as iTunes is a media server, the Apple TV is a media extender, and the iPod is the portable device in the chain. Microsoft has to stick it out in order for this family of devices to make it (although the XBOX could stand on its own if need be).
It still has to make money. If sales keep dropping, what's the point? Where do they say enough is enough? They may sell less than 500,000 units this year. What if the mindshare is lost, and they sell 300,000? What if they sell 200,000? Where does it stop?
Again, the Zune is part of the XBOX brand. Microsoft is just doing a poor job of marketing it as such (in the same way that Apple is failing at advertising the Apple TV as part of its media trio).
It's more than marketing. It's a product that offers nothing more than the market leader to most people. Marketing can't change that. There's just no reason for most people to buy a Zune.
MS has now spent over $175 million on marketing the Zune ecology. Apple has spent how much in marketing the aTv? Almost nothing.
Yet, the Zune sale are way down from almost nothing to begin with, while the aTv sales were up 300%over last year, according to the last conference call, and Apple is still calling it a "hobby", while for MS, the Zune is a major product area.
I don't know that it feels all that cheap, to be honest.
Hold it in your hand along with a Shuffle. You'll see.
I'm one of them (its part of why I bought a couple of Sandisk players). Frankly, I love the idea of all-you-can-eat music.
Ok, I didn't say that NO one likes it. but what happens when you decide to stop paying?
I don't get those who hate iTunes. Granted, I was reluctant (at first) to allow iTunes to manage my music. I preferred the idea of creating folder hierarchies myself. Once I gave in, I realised that I just can't be bothered. I'd rather just dump it all into iTunes and let its database features manage my music.
You can also organize it yourself, so people cant say that they have no control.
But there are those who must diss the product. It's in their narure.
I think Microsoft has room for those who excel. If they do kill off the Zune, I'm sure he'll find a place. Thanks though -- I also hope he's okay
I'm sure they do. But companies are funny that way. In times like this they just lay off departments, and don't always look at WHO they are firing.
I thought that was hilarious too. I remember when Microsoft was reportedly discouraging the use of iPods on their campus (this was well before the release of the Zune). Honestly, the only people I see with Zunes are employees. I used to take the 253 bus that runs by Microsoft; it was full of Zune-carrying employees.
I've seen a few here in NYC, but just a few. A couple of my daughters friends bought one, and kept saying how great it was—until they dumped it and bought another iPod.
I definitely think so. Some people just want to be different for the sake of being different. I almost feel hypocritical, but I don't believe my love for the Mac is simply because it's not Windows--it's because I want a computer that just works (as evidenced by the fact that I am the only one in my department who has not had to deal with a single computer outage in the past three years, while all of my team has at least one blue screen every few months, and two outages per year requiring service).
It's funny, it used to be different when you bought an Apple product. Now it's buying an MS product!
MS advertises to their "partners" that they work with them, and help give them what they want. What they want is DRM, among other things.
What will sticking with the Zune, with great losses and rapidly dropping sales, do for them?
Don't forget that there's a very big difference between the music player market, and the game console market.
While you can lock up a new album, or some other music for a while, that's all you can do, all the content is available to all other companies. No one has been able to get all the licenses that Apple has though, because they have been at this the longest, and have the most sales. So there is nothing to distinguish the Zune positively from the iPod line.
But with consoles, you can have exclusive games. Thats what makes one console better than another. If you lock up a major franchise, you will sell a lot of consoles. This is what MS did with the XBox, and more so with the 360.
If you pays your money, you gets the best games.
I hate to be in the uncomfortable position of defending MS. Its not a lot of fun.
They've made plenty of mistakes and after 2 years have little to show in the portable music player market. But as a said before and you alluded to, they are get marginalized as only necessary for 'work'. That could be disastrous in the long run. Apple are eating away at them there as well. Google docs and Apple's cloud version of iWork may continue to eat away at MS dominance in that area.
I'm admittedly short on solutions for MS. But Apple was under much more difficult circumstances 10 years ago and look where they are today. It not impossible for MS to gain market share and mindshare in the consumer/lifestyle area. They still have a large base of users. But they need to get focused and fast.
(Holding up 3G iPod nano 8 GB
I'm not surprised at this because the "ecosystem" for iPods is so gigantic that in terms of third-party accessories, nothing even comes close to matching its success (I believe Apple owns over 7 out of 10 portable music players sold worldwide). Apple got there first with the iTunes Music Store, and its patented "click wheel" interface ensures that they will continue to be easy to use for its non-touchscreen models.
Indeed, an entirely new discussion show format--podcasts--arrived because Apple created this ability with the iPod's podcast support.
Because Apple has such a command marketshare, they will continue to dominate the market for portable media players even in today's down economy. I'm surprised that a third-party developer did not create a program that would function akin to an iTunes but supports all non-iPod players so can do the highly-integrated media management for a Creative, Samsung, SanDisk SANSA, Sony, etc. player like iTunes does with an iPod.
I'm not strong with portable music (occasionally using PSP for portable audio/video when I can't drag my laptop) but my friend's Creative Zen comes with iTunes-like software. Doesn't look as nice but I think it does have most of functionality (just had a glance).
Also, Windows Media Player, WinAMP... maybe others?... should be capable to synch with number of players, manage album art and other jungles & bells. Again - not sure how deep does it go, but some functionality (outside of iTunes/iPod domain) does exist.
The fact that the Zune is STILL Windows only can't be helping them either. Microsoft's head is stuck in the sand not realising that so many people are using Macs now, especially people who use mp3 players. Terrible thinking on Microsoft's part!
And you reckon any Mac user would purchase MS audio player..?
Think again, sir
Bad as it already is, Mac compatibility for Zune would probably be one of the most useless and pointless exercises ever done in mankind history.
I hate to be in the uncomfortable position of defending MS. Its not a lot of fun.
They've made plenty of mistakes and after 2 years have little to show in the portable music player market. But as a said before and you alluded to, they are get marginalized as only necessary for 'work'. That could be disastrous in the long run. Apple are eating away at them there as well. Google docs and Apple's cloud version of iWork may continue to eat away at MS dominance in that area.
I'm admittedly short on solutions for MS. But Apple was under much more difficult circumstances 10 years ago and look where they are today. It not impossible for MS to gain market share and mindshare in the consumer/lifestyle area. They still have a large base of users. But they need to get focused and fast.
You can feel better, you didn't actually defend them.
I'm not the only person that says they should stick to what they know. Numerous people in the industry are saying that, and have been saying that.
Why do they have to part of the consumer space? They don't!
If they worked on business, they would do a better job there, rather than jumping all over the pace.
Look at the disaster it would have been for them to have acquired Yahoo!
I was really hoping they would get it for the ~$40 billion they were finally offering. What a mess that would have been!
They would have been at least $20 billion in debt from it, adding to their billions they are in long term debt already. They would see employees from Yahoo leave, as some had already left. They would have to spend billions more integrating both companies. It would distract them for years.
Then they would have had to write off tens of billions of the purchase as AMD is doing from their purchase of ATI, but on a smaller scale.
And the best part of it is that neither company has any idea what to do to stop the bloodletting of their marketshare. By the time everything was in place, their total marketshare would have been much lower that was Yahoo's when they started working on the deal.
Boy, did they get lucky!
This is typical of them. They must understand that there are areas in which they do poorly, and must get out of.
And you reckon any Mac user would purchase MS audio player..?
Think again, sir
Bad as it already is, Mac compatibility for Zune would probably be one of the most useless and pointless exercises ever done in mankind history.
Well, considering that very few Windows users are buying Zunes, there likely wouldn't be a whole lot. But I'm sure a few would.
I think the model is well understood.
Just a short story (a true story): One night a group of my friends and I went out to dinner. One of my friends suggested that we should take the bill and split it 7 ways, for the number of the group, and it would come out cheaper in the end. We all agreed. I ordered what I normally ate and so did everyone but the friend who suggested splitting the bill. I looked across the table and he is eating Filet Mignon and Lobster. We all had beef tips or some such. The same as he normally has. To make a long story shorter, my portion of the bill was higher that night as I paid for his dinner splurge. End of story.
The subscription model has always reminded me of this night. It is great for a few people who amass massive music libraries at the expense of those who don't. Every time I see it advocated it is usually accompanied by a statement like:
It never fails to invoke images of my friend cramming steak and lobster in his mouth, laughing and having a good time, all at my expense.
I'm sorry, but this example really fails because it fails to distinguish limited physical resources vs. much less limited digital resources. If it's not to your advantage, you don't have to subscribe. In your silly example, you could have stood up for yourself and had a separate check, but failed to do so when it's obvious that the deal was changed afterwards. The incremental cost is there in your example and does affect you, but it doesn't even apply to this situation, the incremental cost of adding another album to your playlist is nothing. The cost of buying cable service and watching one night a month or thirty nights a month is the same. The cost of internet service is the same whether you just use it for email and a few web pages a day or download hundreds of gigabytes a month is the same, at least in my country. But do that with music, and that's just going too far? That's silly.
It still has to make money. If sales keep dropping, what's the point? Where do they say enough is enough? They may sell less than 500,000 units this year. What if the mindshare is lost, and they sell 300,000? What if they sell 200,000? Where does it stop?
Not necessarily. Remember when Netscape was a paid product? Microsoft lost money on I.E. to gain marketshare, presumably for the purpose of getting more IIS servers out there and, eventually, more developers coding ActiveX crap that doesn't work on any other browser. It worked. There are plenty of sites (albeit, thankfully, fewer and fewer) including a lot of internal corporate Intranet sites that only work with I.E.
If Microsoft can show that there is some relationship between the sales of Zunes, XBOXes, and Windows Media Center PCs, then they can keep losing money. For a little while longer anyway
Ok, I didn't say that NO one likes it. but what happens when you decide to stop paying?
Unfortunately I have to give in to your point, because I already have stopped paying. Not because I didn't like the service, I just got to the point where I had to cut back in some expenses. During the years I had a paid Rhapsody account, I was able to download and listen to music I probably wouldn't have chosen to buy. Some of what I listened to, I did eventually buy. The rest I can no longer listen to.
innovative design!!! Looks count for a lot. not to mention how much better iTunes is compared to MS Mareketplace
Not to mention those bizarre "zunebucks".... ...that mask what you're paying for music, and always leaves a residual odd amount in MS's pockets...
Once upon a time, that was the case. Unfortunately, I think the new (tilt-wheel) mice are awful. The wheels are now way too stiff to push, and sliding back and forth is far less effective (in my opinion) than scrolling back-and-forth with the ball in the Mighty Mouse. Yes, the ball does need maintenance, but I find cleaning it with an alcohol swab every 2-4 weeks takes very little time.
I do (sometimes) miss the thumb buttons on the older intellimouse, but the new designs are horrible.
In that case, I'd recommend the Logitech MX400, which you can use on current iMacs and Mac Pros. It has the thumb buttons on the side and the scroll wheel has a nice "feel" even when doing left-right tilt wheel scrolling. I myself recently switched to the Microsoft Natural Wireless Laser Mouse 6000, which has a really nice feel in my hand (but does have that MS tilt wheel scroll wheel that does take some getting used to).
Not necessarily. Remember when Netscape was a paid product? Microsoft lost money on I.E. to gain marketshare, presumably for the purpose of getting more IIS servers out there and, eventually, more developers coding ActiveX crap that doesn't work on any other browser. It worked. There are plenty of sites (albeit, thankfully, fewer and fewer) including a lot of internal corporate Intranet sites that only work with I.E.
If Microsoft can show that there is some relationship between the sales of Zunes, XBOXes, and Windows Media Center PCs, then they can keep losing money. For a little while longer anyway
I don't believe that model can work here.
There is a big difference between software and hardware. While after the development costs are over, the software can cost nothing to distribute, the hardware will always cost a fair amount. So while MS could afford to develop IE and give it away, they couldn't afford to continue developing and building Zunes, and give them away. The razor, shaver model doesn't apply, because not enough money is being made on the music to pay for the players.
There would have to be tight evidence to show that selling Zunes at a terrible loss, which could amount to several hundred million a year between advertising costs, hardware and software development costs, and the even higher costs of the, now free, product, is responsible for furthering the sales of those other products for MS, not the hardware makers. As about all Windows versions are, or will be media versions to begin with, Zunes don't enter into the sale of those OS's. MS could still do this by supporting other manufacturers players. SanDisk, for example. Or, now that the songs on iTunes have no DRM, they could be supported. This, without the vast losses associated with having to give away players that otherwise no one wants.
Surely, you are not saying that declining sales of the Zunes would be tolerated because of some assumed tie-in to those other products, which were selling before the Zune came put? Then what would the Zune be contributing to those sales? It seems to me that it would just drag them down.
Unfortunately I have to give in to your point, because I already have stopped paying. Not because I didn't like the service, I just got to the point where I had to cut back in some expenses. During the years I had a paid Rhapsody account, I was able to download and listen to music I probably wouldn't have chosen to buy. Some of what I listened to, I did eventually buy. The rest I can no longer listen to.
Oh, goody, I like it when people give in.
...what was that about paying rent for music?
In that case, I'd recommend the Logitech MX400, which you can use on current iMacs and Mac Pros. It has the thumb buttons on the side and the scroll wheel has a nice "feel" even when doing left-right tilt wheel scrolling. I myself recently switched to the Microsoft Natural Wireless Laser Mouse 6000, which has a really nice feel in my hand (but does have that MS tilt wheel scroll wheel that does take some getting used to).
Just had a quick look, and while it does look nice, I still find the 360º scroll ball to be far superior to the 4-way tilt wheel. It's not simply a matter of what I'm used to--I had a Wireless Intellimouse with tilt wheel for about six months before I bought the Mighty Mouse. I never found the tilt to be of any use, and again, the technology that Microsoft uses for the tilt makes the wheel much stiffer to push. Cudos to Logitech if they've managed to soften that up a bit, but I still prefer the ball -- even though it does require far more maintenance than the wheels ever did.
I don't believe that model can work here.
Surely, you are not saying that declining sales of the Zunes would be tolerated because of some assumed tie-in to those other products, which were selling before the Zune came put? Then what would the Zune be contributing to those sales? It seems to me that it would just drag them down.
Your point is well taken, however, I always felt that that the Zune was never really meant to take (much) marketshare from the iPod. Rather, it was developed to taken on Apple (and others) in the home media pc arena.
I wasn't aware that MTV had ended its alliance with Microsoft until someone mentioned the fact elsewhere in this thread. I don't know if that was a major blow to Microsoft's attempt to take on Apple, or not. Most likely it was MTV being rather unimpressed that out of the 37 Zune owners, only twelve of them had signed up for the service
Well for starters the Microsoft mice are a lot nicer than the Apple ones.
They *used* to be better. The MS mice are crap these days. I stick to Logitech, personally. The Apple mice are like the iPod headphones. Straight into the trash.
Microsoft's Zune hit the ground even harder in its third holiday quarter. After two years of annual sales that barely reached the million unit mark, the company reported a major new drop in device sales for the winter quarter.
Microsoft's latest 10-Q filing stated that "Zune platform revenue decreased $100 million or 54% reflecting a decrease in device sales." The music player's sharp decline in revenues helped erase 60% of the company's earnings in its Entertainment and Devices Division, which includes the Xbox gaming platform.
Apple's iPod business, once feared to be at a dead end with satiated demand, hit a new quarterly unit record with sales of 22.7 million units. That's just 3% higher than the company's sales in the year ago quarter, but demonstrates a demand for innovative products even in the midst of difficult economic times.
Apple's record iPod sales don't include the iPhone, which Apple has referred to as its "best iPod yet." With iPhone sales, Apple sold over 27 million mobile devices last quarter, and over 208 million in total since it began selling the iPod.
Key to Apple's success has been its efforts to remain differentiated with unique features while also staying familiar and easy to use with the company's iTunes software. Microsoft's Zune debuted with some unique features, but the company's software churned as MTV pulled its URGE store from Windows Media Player, forcing the company to ship an entirely new, unfamiliar, and not quite functional Zune 2.0 desktop app.
Last year, Microsoft released a new software update but no significant new hardware refresh, leaving the tarnished brand without anything new to sell just as Apple continued to redefine its iPod line with a revamped, Internet browsing iPod touch. A rumored Zune partnership with Nokia also failed to materialize.
Apple's strength in digital media sales within iTunes also helped to keep the iPod in the leadership position among music players, holding on to 71% market share. Growth in iPod touch sales was particularly fueled by its new designation as a handheld gaming platform, leveraging the support the iPhone Apps Store has received from developers.
[ View this article at AppleInsider.com ]
Haha, stupid Zune. Doesn't help that you can't use them on Mac's. What an idiotic way of thinking. Why should the consumer give a crap about OS. They just want to play music. Cutting out Apple consumers is just S.T.U.P.I.D and Zune deserves to crash and burn.
Your point is well taken, however, I always felt that that the Zune was never really meant to take (much) marketshare from the iPod. Rather, it was developed to taken on Apple (and others) in the home media pc arena.
I wasn't aware that MTV had ended its alliance with Microsoft until someone mentioned the fact elsewhere in this thread. I don't know if that was a major blow to Microsoft's attempt to take on Apple, or not. Most likely it was MTV being rather unimpressed that out of the 37 Zune owners, only twelve of them had signed up for the service
Oh, I think that MS, at least Ballmer, intended it to take marketshare away. That was the whole point to it. Otherwise, why bother?
When PlayforSure failed to gain any traction, which was also intended to take marketshare away (indeed, Ballmer stated that it would overwhelm iTunes), MS decided to try copying Apple. There's no doubt, from Ballmer's statements that this was thought to be MS's great weapon in the "music wars". But it also failed. All it's assumed to have done was to take perhaps a fraction 1% of Apple's marketshare, while the rest came from MS's own "partners".
Not too useful. All this accomplishes, is to re-enforce the idea that MS is a bad partner. They've done this kind of thing many times over the years. This is why, despite the strong support for DRM that MS has shown, content companies are even more wary of them, then they are of Apple.
I think that if somehow, MS had gained, say, 15% marketshare, they could claim success. A strong number two, with at least some possibilities of moving up even further over time would have been very good. But it's really been an abject failure.
When a company the size and muscle of a MS fails to make the slightest dent, that's really bad. They should learn something from that instead of pouring more money down the hole.
Now, with economic conditions being what they are, they will have to re-evaluate their strategies.