2. Microsoft has shown its ability to take on a new market (games with the XBOX) and win a dominating market share
They haven't won anything close to dominating market share with the Xbox. Xbox got 15 percent of the worldwide market (Sony has close to 70 percent), and it also lost MS billions.
MS just isn't that strong when they can't leverage Windows or Office. \
the 6% figure for Apple market share which you know full well is also misleading.
How is that misleading? It was true for the US in the last quarter. Please don't tell me the "installed base" crap, that's a tired argument based on supposition and anecdote.
I am wondering what the return rate will be in January. Think of all of the upset kids when their parents get them a Zune instead of the iPod they asked for.
To have gotten 9 to 11% of the HD players in the first month against a firmly entrenched company is a pretty good thing.
The question is whether they can sustain that number...
I have my doubts.
First off, I don't think 9% of the HD market (2% overall) is all that good, considering we're talking Microsoft here. They're the biggest company in tech, that puts a spotlight on everything they do, and they've thrown incredible resources into the marketing and hype of this device.
Second off, like you, I have doubts as to whether the 9% figure is sustainable, considering Zune sales are probably on a spike due to early adopters and being the 'new kid on the block'.
Longer-term, I wouldn't be at all suprised to see even their small current share of the HD player market drift down.
Not really. The iPod has many more features than the Zune. Zune lacks games, calendar, contacts, a clock, alarms, an equalizer and you can't even use it as an external drive. So it has a couple of features the iPod doesn't but lacks a lot of the features iPod users are used to already.
Just wait a little while, and you'll see that WiFi was only the first step. They wouldn't be Microsoft without 'feature-itis'.
All I see in that article is that the stopped doing blogs? what does that have to do with MS supposedly "seeding" sites with false pretenders and bots. Or making their own sites with aforementioned false pretenders?
They have software to spam blogs, sorry, interact with the social. But apart from that just hang around engadget, gizmodo, boing boing and the like for a while and you'll spot the exact same comment text praising how cool the Zune is as soon as there's a news story.
Come on, you honestly think that Microsoft/Edelman, having decided that trying to create a buzz by just shipping Zune out to influential bloggers, sat back and didn't try and make sure those blogs were presenting a good image for them? That they didn't use their own software?
I have to say, I think the worst offender was Engadget. Edelman seemed to be feeding them two or three Zune stories a day and for the most part they bent over and took it, at least until they got one and realised it was a steaming pile of brown stuff. Then, not surprisingly, Edelman took their ball away and decided the social wasn't that social, hence the valleywag piece.
As a journalist, I've been on the end of that kind of marketing where a company will promise you early info, usually under NDA, for their much hyped product provided you cut them some space to more or less run their hype unchallenged. It's never nice morally although sure does help the page views if your competition doesn't have access to that kind of info. You look like a fool if the hype is unjustified though.
For those of you subscribing to the "when MS broadens their line-up their marketshare has nowhere to go but up" line of thinking:
What does Zune have that the iPod doesn't? Wireless, and a slightly larger screen (plus, I guess, iPod backlash cache).
So how does MS leverage that slight difference into shuffle like form factors, or flash players in general?
Since flash players are where the action is, I'm having a hard time seeing how MS "extends" the Zune concept to a Nano competitor, let alone a Shuffle wannabe.
Sure, they can get something out the door, but without wireless or bigger screen, how are such models going to catch anyone's eye? And if the Zune is a "platform", how does a player without wireless make any sense?
Blah. Looks-wise, one could also say that MS OSes haven't really changed that much from Win95 to XP. But XP is considerably better under the hood than 95.... ditto OS X Tiger to OS X 10.0.
Under the hood, WindowsXP isn't that much different to the beta of NT3.1 I was writing software for in 1991 though. Sadly, Vista isn't much different either since they've chucked out most of the stuff that would have made it different.
Back in 1993 or so they had a prototype OS called Cairo. That was cool and included things that should have been in Vista including WinFS. It was working 14 years ago.
Meanwhile Apple takes 8 months to get ZFS support into the OS. MS - slowest developers EVAH!!!
You are both right, the problem is that you aren't talking about what Melgross was talking about. Your links appear to use figures that combine flash and hard drive players as one market. Melgross was referring specifically to the hard drive player subset of the market.
First 2% marketshare is bad. Not that bad to Microsoft, as it is to anyone else short of electonic monsters.
The reason is 1: it's a lost header 2:It's new and (was) hyped.
When you make something in the red, you buy manufacturing contracts. They say things like produce xxx at yyy price in zzz timeframe.
If you can't sell it, you're getting over stocked, and thus not only do you eat the overstock or breakcontracts, the company(ies) that do business with you won't believe you again for the next generation.
Manufacturing companies work on paper thin margins, they are only in it if you can garentee them the contracted volume.
The other thing is the general word-of-mouth image. Mp3 players apple has proved works on style.
If you can't make a big splash(and no better time to make one then holidays) you lose and lose badly on the next round. It's a fashion statement.
Both problems Microsoft can solve with..yes, you guessed it, more money.
The problem is. You don't want to throw more money then you want, ditto.
2% marketshare for the busiest month of the year shows, the bean counters not going to be happy about it.
You expect 10-20% for a lost header. Which you then renegoiate contacts with manufacturing to lower prices, and then you keep going up.
If it was making a profit, that's another senerio, but we know microsoft isn't. And to make it worse Microsoft isn't a manufacturer, it's toshiba I believe.
With a fairly poor player with only one semi cool advantage, they still did a eighth of Apples' HD player business.
You are assuming that they didn't take any share from Creative, Toshiba, etc. That is not a very good assumption, and the data do not support it (e.g., Apple's total share has declined by only 0.8% even as Zune captured 2% of the market).
Quote:
Don't forget that Apple only has 6% of the computer business here in the US.
Is anyone here laughing at that number?
Please see my post above. Apple is capturing 6% of the computer business in the US while charging margins that are as much as 50% above manufacturing costs (Apple computer hardware margins are generally 25-30% of average selling price, and that includes discounts). That is not laughable at all.
Microsoft is capturing 2% of the MP3 player market in the US while charging margins of NEGATIVE 20% or below. That is laughable...or rather, it would be laughable if I did not have a stake in MSFT stock.
Quote:
It never pays to be overconfident.
Indeed. But it pays even less to make stupid business decisions and throw good money after bad, which unfortunately for us MSFT shareholders is exactly what the company is proceeding to do.
The key things to remember are:
(1) Anyone can gain some share if they are willing to sell things for a loss.
(2) You can only sell things for a loss for a limited amount of time. (And often you can't even do that unless you're a big company that has deep pockets to begin with.)
Please see my post above. Apple is capturing 6% of the computer business in the US while charging margins that are as much as 50% above manufacturing costs (Apple computer hardware margins are generally 25-30% of average selling price, and that includes discounts). That is not laughable at all.
Actually no. I know from the inside 25% is the deepest they cut to anyone. Even to retailers. and this is for Pro systems (macbook pro, mac pro).
For consumer level, it's like 10% or less. (I should know). So apple's pretty thin on consumer products and make more money on pro systems.
Actually no. I know from the inside 25% is the deepest they cut to anyone. Even to retailers. and this is for Pro systems (macbook pro, mac pro).
For consumer level, it's like 10% or less. (I should know). So apple's pretty thin on consumer products and make more money on pro systems.
I think you misunderstood bigmig. You are talking about the retailer's margin, bigmig was talking about the difference between Apple's cost to manufacture vs. what they get for it. Apple is pretty greedy and demanding though, I think that's a major reason they don't have much presence with their computers with the retail chains.
Yeah, maybe they'll add podcasting too. It's quite popular don't you know.
ROFLMAO!
Yeah, I dunno what's up with MS and their apparent hate of podcasting. I still remember when they tried to get everyone to refer to it as 'blogcasting', and failed miserably (Google search for 'blogcasting'- 67K hits. Search for podcasting: 34 MILLION hits).
Under the hood, WindowsXP isn't that much different to the beta of NT3.1 I was writing software for in 1991 though. Sadly, Vista isn't much different either since they've chucked out most of the stuff that would have made it different.
Back in 1993 or so they had a prototype OS called Cairo. That was cool and included things that should have been in Vista including WinFS. It was working 14 years ago.
Meanwhile Apple takes 8 months to get ZFS support into the OS. MS - slowest developers EVAH!!!
The problem was described thusly by a Microsoft employee in an MS blog:
Apple's OS development:
Boss- That sucks. Fix it.
Dev Team- Okay.
Microsoft's OS development:
Get approval from 10 different committees, okays from a dozen different bosses, and eat red tape 'til you die, die, dieeee.... and then the answer finally comes back after months and months:
You are both right, the problem is that you aren't talking about what Melgross was talking about. Your links appear to use figures that combine flash and hard drive players as one market. Melgross was referring specifically to the hard drive player subset of the market.
That's right. I can't understand why it would be compared to anything other than a HD model.
The rest aren't comparable.
I am aware that the overall market decides how much music will be bought from MS, or Apple, but still. If MS isn't competing in a specific market, then that market shouldn't be used in the figures without mentioning that the company doesn't compete there.
When Apple only had HD players, they were compared to other HD player models.
That doesn't negate the fact that whatever marketshare Zune might take will not be from the iPod, rather from MS's "Plays For Sure" partners, so Apple really doesn't have anything to worry about.
And just how do you know that?
Apple's marketshare has been fairly steady the past year or so. But, even then, it has been moving up a point or so every few months.
If that has stopped, that would show somwthing. Also, we would have to see the figures for all of the other players in the catagory, as well as how many people decided to buy the HD Zune because of its unique features, rather than a flash player.
Comments
Hey guys:
2. Microsoft has shown its ability to take on a new market (games with the XBOX) and win a dominating market share
They haven't won anything close to dominating market share with the Xbox. Xbox got 15 percent of the worldwide market (Sony has close to 70 percent), and it also lost MS billions.
MS just isn't that strong when they can't leverage Windows or Office.
.
the 6% figure for Apple market share which you know full well is also misleading.
How is that misleading? It was true for the US in the last quarter. Please don't tell me the "installed base" crap, that's a tired argument based on supposition and anecdote.
To have gotten 9 to 11% of the HD players in the first month against a firmly entrenched company is a pretty good thing.
The question is whether they can sustain that number...
I have my doubts.
First off, I don't think 9% of the HD market (2% overall) is all that good, considering we're talking Microsoft here. They're the biggest company in tech, that puts a spotlight on everything they do, and they've thrown incredible resources into the marketing and hype of this device.
Second off, like you, I have doubts as to whether the 9% figure is sustainable, considering Zune sales are probably on a spike due to early adopters and being the 'new kid on the block'.
Longer-term, I wouldn't be at all suprised to see even their small current share of the HD player market drift down.
.
Not really. The iPod has many more features than the Zune. Zune lacks games, calendar, contacts, a clock, alarms, an equalizer and you can't even use it as an external drive. So it has a couple of features the iPod doesn't but lacks a lot of the features iPod users are used to already.
Just wait a little while, and you'll see that WiFi was only the first step. They wouldn't be Microsoft without 'feature-itis'.
.
All I see in that article is that the stopped doing blogs? what does that have to do with MS supposedly "seeding" sites with false pretenders and bots. Or making their own sites with aforementioned false pretenders?
am I missing something?
Yep...
http://edelman.com/news/storycrafter...s.aspx?hid=171
They have software to spam blogs, sorry, interact with the social. But apart from that just hang around engadget, gizmodo, boing boing and the like for a while and you'll spot the exact same comment text praising how cool the Zune is as soon as there's a news story.
Come on, you honestly think that Microsoft/Edelman, having decided that trying to create a buzz by just shipping Zune out to influential bloggers, sat back and didn't try and make sure those blogs were presenting a good image for them? That they didn't use their own software?
I have to say, I think the worst offender was Engadget. Edelman seemed to be feeding them two or three Zune stories a day and for the most part they bent over and took it, at least until they got one and realised it was a steaming pile of brown stuff. Then, not surprisingly, Edelman took their ball away and decided the social wasn't that social, hence the valleywag piece.
As a journalist, I've been on the end of that kind of marketing where a company will promise you early info, usually under NDA, for their much hyped product provided you cut them some space to more or less run their hype unchallenged. It's never nice morally although sure does help the page views if your competition doesn't have access to that kind of info. You look like a fool if the hype is unjustified though.
What does Zune have that the iPod doesn't? Wireless, and a slightly larger screen (plus, I guess, iPod backlash cache).
So how does MS leverage that slight difference into shuffle like form factors, or flash players in general?
Since flash players are where the action is, I'm having a hard time seeing how MS "extends" the Zune concept to a Nano competitor, let alone a Shuffle wannabe.
Sure, they can get something out the door, but without wireless or bigger screen, how are such models going to catch anyone's eye? And if the Zune is a "platform", how does a player without wireless make any sense?
Blah. Looks-wise, one could also say that MS OSes haven't really changed that much from Win95 to XP. But XP is considerably better under the hood than 95.... ditto OS X Tiger to OS X 10.0.
Under the hood, WindowsXP isn't that much different to the beta of NT3.1 I was writing software for in 1991 though. Sadly, Vista isn't much different either since they've chucked out most of the stuff that would have made it different.
Back in 1993 or so they had a prototype OS called Cairo. That was cool and included things that should have been in Vista including WinFS. It was working 14 years ago.
Meanwhile Apple takes 8 months to get ZFS support into the OS. MS - slowest developers EVAH!!!
Just wait a little while, and you'll see that WiFi was only the first step. They wouldn't be Microsoft without 'feature-itis'.
.
Yeah, maybe they'll add podcasting too. It's quite popular don't you know.
You are both right, the problem is that you aren't talking about what Melgross was talking about. Your links appear to use figures that combine flash and hard drive players as one market. Melgross was referring specifically to the hard drive player subset of the market.
...as I hang my head in shame...
I stand corrected!
First 2% marketshare is bad. Not that bad to Microsoft, as it is to anyone else short of electonic monsters.
The reason is 1: it's a lost header 2:It's new and (was) hyped.
When you make something in the red, you buy manufacturing contracts. They say things like produce xxx at yyy price in zzz timeframe.
If you can't sell it, you're getting over stocked, and thus not only do you eat the overstock or breakcontracts, the company(ies) that do business with you won't believe you again for the next generation.
Manufacturing companies work on paper thin margins, they are only in it if you can garentee them the contracted volume.
The other thing is the general word-of-mouth image. Mp3 players apple has proved works on style.
If you can't make a big splash(and no better time to make one then holidays) you lose and lose badly on the next round. It's a fashion statement.
Both problems Microsoft can solve with..yes, you guessed it, more money.
The problem is. You don't want to throw more money then you want, ditto.
2% marketshare for the busiest month of the year shows, the bean counters not going to be happy about it.
You expect 10-20% for a lost header. Which you then renegoiate contacts with manufacturing to lower prices, and then you keep going up.
If it was making a profit, that's another senerio, but we know microsoft isn't. And to make it worse Microsoft isn't a manufacturer, it's toshiba I believe.
2% is a start - has to start somewhere right? We'll see if it increases.
If you're Microsoft, yes it's fine. they seem to have enough money to throw at anything.
Anyone else...well you're here to make money...right???
With a fairly poor player with only one semi cool advantage, they still did a eighth of Apples' HD player business.
You are assuming that they didn't take any share from Creative, Toshiba, etc. That is not a very good assumption, and the data do not support it (e.g., Apple's total share has declined by only 0.8% even as Zune captured 2% of the market).
Don't forget that Apple only has 6% of the computer business here in the US.
Is anyone here laughing at that number?
Please see my post above. Apple is capturing 6% of the computer business in the US while charging margins that are as much as 50% above manufacturing costs (Apple computer hardware margins are generally 25-30% of average selling price, and that includes discounts). That is not laughable at all.
Microsoft is capturing 2% of the MP3 player market in the US while charging margins of NEGATIVE 20% or below. That is laughable...or rather, it would be laughable if I did not have a stake in MSFT stock.
It never pays to be overconfident.
Indeed. But it pays even less to make stupid business decisions and throw good money after bad, which unfortunately for us MSFT shareholders is exactly what the company is proceeding to do.
The key things to remember are:
(1) Anyone can gain some share if they are willing to sell things for a loss.
(2) You can only sell things for a loss for a limited amount of time. (And often you can't even do that unless you're a big company that has deep pockets to begin with.)
Please see my post above. Apple is capturing 6% of the computer business in the US while charging margins that are as much as 50% above manufacturing costs (Apple computer hardware margins are generally 25-30% of average selling price, and that includes discounts). That is not laughable at all.
Actually no. I know from the inside 25% is the deepest they cut to anyone. Even to retailers. and this is for Pro systems (macbook pro, mac pro).
For consumer level, it's like 10% or less. (I should know). So apple's pretty thin on consumer products and make more money on pro systems.
Actually no. I know from the inside 25% is the deepest they cut to anyone. Even to retailers. and this is for Pro systems (macbook pro, mac pro).
For consumer level, it's like 10% or less. (I should know). So apple's pretty thin on consumer products and make more money on pro systems.
I think you misunderstood bigmig. You are talking about the retailer's margin, bigmig was talking about the difference between Apple's cost to manufacture vs. what they get for it. Apple is pretty greedy and demanding though, I think that's a major reason they don't have much presence with their computers with the retail chains.
Yeah, maybe they'll add podcasting too. It's quite popular don't you know.
ROFLMAO!
Yeah, I dunno what's up with MS and their apparent hate of podcasting. I still remember when they tried to get everyone to refer to it as 'blogcasting', and failed miserably (Google search for 'blogcasting'- 67K hits. Search for podcasting: 34 MILLION hits).
.
Under the hood, WindowsXP isn't that much different to the beta of NT3.1 I was writing software for in 1991 though. Sadly, Vista isn't much different either since they've chucked out most of the stuff that would have made it different.
Back in 1993 or so they had a prototype OS called Cairo. That was cool and included things that should have been in Vista including WinFS. It was working 14 years ago.
Meanwhile Apple takes 8 months to get ZFS support into the OS. MS - slowest developers EVAH!!!
The problem was described thusly by a Microsoft employee in an MS blog:
Apple's OS development:
Boss- That sucks. Fix it.
Dev Team- Okay.
Microsoft's OS development:
Get approval from 10 different committees, okays from a dozen different bosses, and eat red tape 'til you die, die, dieeee.... and then the answer finally comes back after months and months:
That sucks. Fix it.
Dev Team- Okay.
And then the process begins anew on the fix....
.
You are both right, the problem is that you aren't talking about what Melgross was talking about. Your links appear to use figures that combine flash and hard drive players as one market. Melgross was referring specifically to the hard drive player subset of the market.
That's right. I can't understand why it would be compared to anything other than a HD model.
The rest aren't comparable.
I am aware that the overall market decides how much music will be bought from MS, or Apple, but still. If MS isn't competing in a specific market, then that market shouldn't be used in the figures without mentioning that the company doesn't compete there.
When Apple only had HD players, they were compared to other HD player models.
That doesn't negate the fact that whatever marketshare Zune might take will not be from the iPod, rather from MS's "Plays For Sure" partners, so Apple really doesn't have anything to worry about.
And just how do you know that?
Apple's marketshare has been fairly steady the past year or so. But, even then, it has been moving up a point or so every few months.
If that has stopped, that would show somwthing. Also, we would have to see the figures for all of the other players in the catagory, as well as how many people decided to buy the HD Zune because of its unique features, rather than a flash player.
Only then can we say where sales are coming from.