Apple, Microsoft trade places selling iPod touch and Zune HD
Apple makes its money selling hardware while Microsoft's revenues are from software. Yet in the mobile device war heating up between the iPod touch and the Zune HD, Microsoft is focusing on hardware features while Apple is shifting its marketing attention toward the iPod's vast library of third party software, particularly games.
In order to captivate users' attention in the exploding category of mobile entertainment devices, the two companies have stepped outside their usual core competencies. In the process, both companies have made mistakes in areas where they should be expected to shine.
iPod kills the video star
Despite Apple's hardware savvy in consumer devices, based in part on eight years of wildly successful iPod sales, the company reportedly fumbled the delivery of planned video camera features in the latest generation of the iPod touch. Rather than expanding the video capture features of the iPhone 3GS across all iPod models, Apple restricted it to the new iPod nano, leaving the latest iPod touch with nothing more than a blank spot where the camera mechanism was reportedly supposed to be installed.
Sources say the decision was made late in the game in response to bad parts that didn't work as expected. Steve Jobs, ever the showman, explained to the New York Times that Apple wanted to bring the price of the iPod touch down as rapidly as possible, and saw more benefit to pitching the iPod touch as a gaming device than as a video camera. That distinction was left to the iPod nano.
"What customers told us was, they started to see it as a game machine," Jobs said. "We started to market it that way, and it just took off. And now what we really see is it?s the lowest-cost way to the App Store, and that?s the big draw. So what we were focused on is just reducing the price to $199. We don?t need to add new stuff. We need to get the price down where everyone can afford it."
According to sources familiar with Apple's plans, new devices in the Apple pipeline are regularly given experimental features that can be pulled last minute if they don't work out as planned, or contribute too much to the devices' cost or introduce other problems. In any event, the lack of a rumored feature on the iPod touch could put Apple in the position Microsoft found itself in while launching Vista: forced to defend expected features that didn't make the cut rather than being able to focus on the details it wanted to promote.
That in turn could give the Zune HD more of an opportunity than it might have had if Apple had launched the iPod touch with video recording features. The other ironic twist is that Apple's lapse in hardware savvy, whether due to bad parts or simply done for cost savings, is being made up for in a "developers, developers, developers" pitch that promotes the range and depth of mobile software available for the iPod touch, particularly game titles. That's a page right out of Microsoft's playbook.
Banking on hardware
At the same time, Microsoft has similarly shifted attention away from its own core competency in developing software platforms and nurturing third party software to promote the Zune HD as a series of hardware features: primarily its OLED screen, NVIDIA Tegra processor, and its HD Radio support. That sounds a lot like the old Apple.
Promoting OLED is an expensive option for Microsoft, and one which carries some early adopter risk. A parts teardown by iFixit says the Samsung-built 3.3" display "is likely the most expensive item on the Zune's bill of materials" and "incredibly thin (1mm)." The part is credited with contributing to the Zune HD's battery life, which is rated longer than the iPod touch despite having a battery capacity of 660 mAh. "That's about 16% less than the 789 mAh battery in the new iPod touch," the teardown notes.
Back during the early days of Mac OS X, Apple focused primarily on the Mac's hardware advantages, such as the iMac's creative LCD panels and its PowerPC processor that Apple advertised as smoking Intel's Pentium 4 offerings, which at the time were running hot rather than fast. Apple didn't have as much to talk about on the Mac software front, as developers continued to look at the company's roadmap with skepticism. During the first several years of iPod development, Apple similarly focused primarily on hardware features, with only limited dabbling in closed, selective efforts to produce iPod Games.
That all changed with the 2008 iPhone App Store, which opened for business with hundreds of developers lined up to build titles for the five million and growing installed base of iPhone users. Along with its efforts to develop a mobile WebKit browser, Apple has captivated the mobile software industry's attention, and now sits on an installed base of 50 million iPhone and iPod touch users.
No app store yet for Zune HD
This has resulted in Microsoft being cornered by expectations that it will immediately match the development tools, software merchandising, scale, and scope of Apple's runaway App Store success, both with the Zune and with Windows Mobile. While both families of devices are built upon the same core operating system, Microsoft doesn't have a unified strategy for software that works across both. In contrast, Apple's App Store titles are designed to work across the iPhone and iPod touch without a hitch.
An interview with Brian Seitz, the Zune's marketing manager, reveals that Microsoft's Zune team has been developing most of its own software and that no real market yet exists for third party titles.
"When it comes to apps on Zune on the 15th," Seitz told the Seattle Times, "what you'll see is primarily games. We're refreshing a lot of the games to take advantage of the multitouch. Casual games, plus a couple of apps like the weather app and calculator. Plus we're building a Twitter (app), a Facebook (app) and a bunch of 3D games like 'Project Gotham Racing' that will come out in November.
"All of our apps are free ... and it's a managed solution right now, so we're building these apps or working with third parties to build these apps and provide them to our customers for free."
Developers, Developer Developers?
Asked about third party development, Seitz said, "It's hard to say right now. If you look around the company at other places where things like this are important, Windows Mobile rises to the top. They have devices which are always connected, which make applications like maps really cool and important.
"On a sometimes-connected device, what people are using them for are games. So what we didn't want to do was build two parallel app store experiences that didn't work together.
"Right now our product roadmaps didn't line up perfectly for us to snap to what they're doing or vice versa. That being said, we know people want things like this on their devices so we're going to build them ourselves, they're going to be super high-quality, and they're going to be free. Down the road if there's a way we can work with Windows Mobile or another group inside the company that's building an app store and take advantage of that, that's something we'll look into."
Mobile apps are a 'distraction'
Asked about the features Apple was adding to its iPods, including video recording, Seitz replied, "The more things like that that make their way into these devices that aren't about great music and video playback, the more it's distracting or sacrificing that original purpose of the device. Apps are jamming in, cameras -- that's work that's not being done on the music front."
While Apple once talked about the iPod being all about music, today it is augmenting music with other features, although music remains at the core of the iPod touch and iTunes. These days, new music-related features like Genius Mixes and Voice Control are getting equal billing with web browsing and game play, and Apple's ads for the touch are almost entirely about the range of video games available.
Everyone already knows that the iPod is a music player, so Apple is expanding into other software markets, taking new shots at handheld gaming devices from Sony and Nintendo. At the same time, Apple has delivered features that enable third party game developers to let iPod users play and control their own song playback within their games.
As the Zune HD attempts to reverse the course of the Zune brand in its third season on the market, Microsoft is finding itself in the role of the underdog platform, resorting to the same strategies Apple used to promote the Mac under the umbrella of ubiquitous Windows PCs. It remains to be seen how Microsoft's 'get a Zune' campaigns and efforts to build out direct retail stores will work out, but at least the company has an almost flawless model to follow in trying to beat back Apple's increasing domination of the mobile device world.
In order to captivate users' attention in the exploding category of mobile entertainment devices, the two companies have stepped outside their usual core competencies. In the process, both companies have made mistakes in areas where they should be expected to shine.
iPod kills the video star
Despite Apple's hardware savvy in consumer devices, based in part on eight years of wildly successful iPod sales, the company reportedly fumbled the delivery of planned video camera features in the latest generation of the iPod touch. Rather than expanding the video capture features of the iPhone 3GS across all iPod models, Apple restricted it to the new iPod nano, leaving the latest iPod touch with nothing more than a blank spot where the camera mechanism was reportedly supposed to be installed.
Sources say the decision was made late in the game in response to bad parts that didn't work as expected. Steve Jobs, ever the showman, explained to the New York Times that Apple wanted to bring the price of the iPod touch down as rapidly as possible, and saw more benefit to pitching the iPod touch as a gaming device than as a video camera. That distinction was left to the iPod nano.
"What customers told us was, they started to see it as a game machine," Jobs said. "We started to market it that way, and it just took off. And now what we really see is it?s the lowest-cost way to the App Store, and that?s the big draw. So what we were focused on is just reducing the price to $199. We don?t need to add new stuff. We need to get the price down where everyone can afford it."
According to sources familiar with Apple's plans, new devices in the Apple pipeline are regularly given experimental features that can be pulled last minute if they don't work out as planned, or contribute too much to the devices' cost or introduce other problems. In any event, the lack of a rumored feature on the iPod touch could put Apple in the position Microsoft found itself in while launching Vista: forced to defend expected features that didn't make the cut rather than being able to focus on the details it wanted to promote.
That in turn could give the Zune HD more of an opportunity than it might have had if Apple had launched the iPod touch with video recording features. The other ironic twist is that Apple's lapse in hardware savvy, whether due to bad parts or simply done for cost savings, is being made up for in a "developers, developers, developers" pitch that promotes the range and depth of mobile software available for the iPod touch, particularly game titles. That's a page right out of Microsoft's playbook.
Banking on hardware
At the same time, Microsoft has similarly shifted attention away from its own core competency in developing software platforms and nurturing third party software to promote the Zune HD as a series of hardware features: primarily its OLED screen, NVIDIA Tegra processor, and its HD Radio support. That sounds a lot like the old Apple.
Promoting OLED is an expensive option for Microsoft, and one which carries some early adopter risk. A parts teardown by iFixit says the Samsung-built 3.3" display "is likely the most expensive item on the Zune's bill of materials" and "incredibly thin (1mm)." The part is credited with contributing to the Zune HD's battery life, which is rated longer than the iPod touch despite having a battery capacity of 660 mAh. "That's about 16% less than the 789 mAh battery in the new iPod touch," the teardown notes.
Back during the early days of Mac OS X, Apple focused primarily on the Mac's hardware advantages, such as the iMac's creative LCD panels and its PowerPC processor that Apple advertised as smoking Intel's Pentium 4 offerings, which at the time were running hot rather than fast. Apple didn't have as much to talk about on the Mac software front, as developers continued to look at the company's roadmap with skepticism. During the first several years of iPod development, Apple similarly focused primarily on hardware features, with only limited dabbling in closed, selective efforts to produce iPod Games.
That all changed with the 2008 iPhone App Store, which opened for business with hundreds of developers lined up to build titles for the five million and growing installed base of iPhone users. Along with its efforts to develop a mobile WebKit browser, Apple has captivated the mobile software industry's attention, and now sits on an installed base of 50 million iPhone and iPod touch users.
No app store yet for Zune HD
This has resulted in Microsoft being cornered by expectations that it will immediately match the development tools, software merchandising, scale, and scope of Apple's runaway App Store success, both with the Zune and with Windows Mobile. While both families of devices are built upon the same core operating system, Microsoft doesn't have a unified strategy for software that works across both. In contrast, Apple's App Store titles are designed to work across the iPhone and iPod touch without a hitch.
An interview with Brian Seitz, the Zune's marketing manager, reveals that Microsoft's Zune team has been developing most of its own software and that no real market yet exists for third party titles.
"When it comes to apps on Zune on the 15th," Seitz told the Seattle Times, "what you'll see is primarily games. We're refreshing a lot of the games to take advantage of the multitouch. Casual games, plus a couple of apps like the weather app and calculator. Plus we're building a Twitter (app), a Facebook (app) and a bunch of 3D games like 'Project Gotham Racing' that will come out in November.
"All of our apps are free ... and it's a managed solution right now, so we're building these apps or working with third parties to build these apps and provide them to our customers for free."
Developers, Developer Developers?
Asked about third party development, Seitz said, "It's hard to say right now. If you look around the company at other places where things like this are important, Windows Mobile rises to the top. They have devices which are always connected, which make applications like maps really cool and important.
"On a sometimes-connected device, what people are using them for are games. So what we didn't want to do was build two parallel app store experiences that didn't work together.
"Right now our product roadmaps didn't line up perfectly for us to snap to what they're doing or vice versa. That being said, we know people want things like this on their devices so we're going to build them ourselves, they're going to be super high-quality, and they're going to be free. Down the road if there's a way we can work with Windows Mobile or another group inside the company that's building an app store and take advantage of that, that's something we'll look into."
Mobile apps are a 'distraction'
Asked about the features Apple was adding to its iPods, including video recording, Seitz replied, "The more things like that that make their way into these devices that aren't about great music and video playback, the more it's distracting or sacrificing that original purpose of the device. Apps are jamming in, cameras -- that's work that's not being done on the music front."
While Apple once talked about the iPod being all about music, today it is augmenting music with other features, although music remains at the core of the iPod touch and iTunes. These days, new music-related features like Genius Mixes and Voice Control are getting equal billing with web browsing and game play, and Apple's ads for the touch are almost entirely about the range of video games available.
Everyone already knows that the iPod is a music player, so Apple is expanding into other software markets, taking new shots at handheld gaming devices from Sony and Nintendo. At the same time, Apple has delivered features that enable third party game developers to let iPod users play and control their own song playback within their games.
As the Zune HD attempts to reverse the course of the Zune brand in its third season on the market, Microsoft is finding itself in the role of the underdog platform, resorting to the same strategies Apple used to promote the Mac under the umbrella of ubiquitous Windows PCs. It remains to be seen how Microsoft's 'get a Zune' campaigns and efforts to build out direct retail stores will work out, but at least the company has an almost flawless model to follow in trying to beat back Apple's increasing domination of the mobile device world.
Comments
Sheldon
"What customers told us was, they started to see it as a game machine,"
What a Jokester. Whoever said this? God does he spin things around.
The OLED screen is awesome. In fact I remember well my first iPhone review on the forums here way back when. I distinctly remember mentioning the LCD screen as its weak point. The next touch and iPhone will get OLED displays and the Prince won't know where to turn.
I hear crow tastes just like chicken!
I can't believe I saw they day when Apple would compete for cheap. And it wasn't even a netbook - it was something called a FLIP?
/chuckle!
I can't believe I saw they day when Apple would compete for cheap. And it wasn't even a netbook - it was something called a FLIP?
I think that is targeted at the 8-25 demographic.
I think that is targeted at the 8-25 demographic.
And?
So?
Cheap is cheap.
Take Windows Media Center for example and compare it to Front Row. What can't Windows Media Center do? Front Row on the other hand has a lot of limitations. However, using the two programs results in something else entirely, Front Row is a joy to use (if it is capable of doing what you want) while Windows Media Center makes the most basic tasks complicated. Look no further than the Windows Media Center remote and the Apple remote.
PC manufacturers have long touted their specs as superior. Apple has provided subtle enhancements to the user experience while sometimes falling behind in specs. iSight, ambient light sensors, illuminated keyboards, etc. The focus is on the user, not the spec sheet.
Now with the Zune Microsoft is again advertising its specs while Apple is discussing how the iPod touch is used. Apple doesn't even provide the information on its processing and graphics capabilites on the specs page. With Microsoft, you get a bunch of features and specs that look good on paper and may be needed for certain things (ie., games). With Apple you get a well thought out user experience with seamless integration between hardware and software.
I can't believe I saw they day when Apple would compete for cheap. And it wasn't even a netbook - it was something called a FLIP?
I can see we have a real MS Luddie here. :-) Inexpensive for value received is vastly different than cheap. But using MS stuff, I can see where your error is. :-)
Apple has taken a great music player (Nano) and added a free video camera and reduced the price. Now, there is the WOW.
Just a thought.
en
What a Jokester. Whoever said this? God does he spin things around.
Hmm... typical Teckstud. You whine about people not providing links, or proof of any kind when statements are made yet you seem privileged to grant immunity to yourself for doing exactly that.
The CEO publicly states that market research states their product was being perceived more as a game machine. They probably spent quite a bit of $$ for said research and as far as myself and the rest of the world is concerned, we'll consider that said and done.
Yet you on the other hand - as always, immediately dispute that. As you would b***h to everyone else, you better provide some kind of research in the form of links, articles, research, or anything else that requires you to get out of your basement and do actual work. Otherwise, you'll continue to be labeled as an individual that just enjoys spewing crap out of your a** in the hopes something will stick.
Apple's stock is climbing ever so higher, they are still beating estimates, revenue is up, revenue is forecast to seriously go even higher, customer satisfaction is one of the best in the industry, their doing better in this recession than most other tech companies, and time again, they prove you wrong. Yet somehow your self-inflated ego continues to put you in a vapor-position of knowing how to better run that company.
Give yourself a rest, and go find yourself a clue Teckstud. Once again, looks like people will just have to resort to hitting the filter button on you. It's one thing to have an opinion, but the nonsense you continue to jettison just ruins the enjoyment of AI. You do not contribute. You pollute.
I can see we have a real MS Luddie here. :-) Inexpensive for value received is vastly different than cheap. But using MS stuff, I can see where your error is. :-)
Apple has taken a great music player (Nano) and added a free video camera and reduced the price. Now, there is the WOW.
Just a thought.
en
That records poor quality video and is competing againt the cheap Flip which SJ even mentioned.
No MS Luddie here- just a realist.
I see your point though- if I can put on your magic hat and pretend it's free.
Hmm... typical Teckstud. You whine about people not providing links, or proof of any kind when statements are made yet you seem privileged to grant immunity to yourself for doing exactly that.
The CEO publicly states that market research states their product was being perceived more as a game machine. They probably spent quite a bit of $$ for said research and as far as myself and the rest of the world is concerned, we'll consider that said and done.
Why do you believe everything that man tells you? You show me the link to the research survey's answers. Any real gamer will tell you that statement's BS. The article even tells you that that camera was supposed to happen and didn't. If that's not a made up excuse - then what is? If it's such a great gaming device why doesn't Apple make a companion joystick? Go back to your kool-aid drip.
What a Jokester. Whoever said this? God does he spin things around.
Man, you've been on a tear, on a rant mode for a few weeks now. Take your meds, or take a deep breath, or get out and go for a walk or something, please. It's really getting tiresome.
In any event, the lack of a rumored feature on the iPod touch could put Apple in the position Microsoft found itself in while launching Vista: forced to defend expected features that didn't make the cut rather than being able to focus on the details it wanted to promote.
A false premise. Who knows about these "rumored features?" Only the obsessive followers of rumors. And who actually believes in them? A subset of the obsessive followers of rumors. The problem Microsoft had with Vista is that features they had actually announced and promised weren't delivered. The is obviously a very different issue, not comparable at all.
Why do you believe everything that man tells you? You show me the link to the research survey's answers. Any real gamer will tell you that statement's BS. The article even tells you that that camera was supposed to happen and didn't. If that's not a made up excuse - then what is? If it's such a great gaming device why doesn't Apple make a companion joystick? Go back to your kool-aid drip.
Your problem is that you think he's talking about "real" gamers. He's not, nor is anyone else here except you. "Real" gamers are a small niche and don't even bother buying portable gaming devices. Even the quality of the PSP is a joke compared to the consoles out there. When people buy portable gaming devices they aren't buying them for "real" gamers - they are buying them for casual gamers and this is where Apple is taking over. Before you actually had to go out of your way to buy something that did nothing but play games. Sure you can get those little discs or maybe put some songs on an SD card and shove them in your PSP but it is still just a gaming device. Now w/ the iPod people get what they most want (a music player) and now you're just adding on this huge capability for games - casual games. Apple is after the casual gamer (just like nintendo w/ the DS and even the Wii) - if you can't realize that then, well, ok but we're not talking "real" gamers, we're talking about average gamers (not only that but average MOBILE gamers).
Gain some perspective teck...
Your problem is that you think he's talking about "real" gamers.
Gain some perspective teck...
No my problem is that the article is even implying that he's spinning (read lying) based on the fact that there is a blank space where a camera was supposed to go and was probably pulled.
Logic holds and has been discussed many a time here is that the Touch is so popular because of its wireless internet capabilties (mail, Safari) and apps rather than its gaming. It's basically the iPhone without AT&T. I suppose we would only really know if Apple released percentage of games sold at the App store and that percentage of Touch buyers.
Peace.
That records poor quality video and is competing againt the cheap Flip which SJ even mentioned.
No MS Luddie here- just a realist.
I see your point though- if I can put on your magic hat and pretend it's free.
Do you actually own one of these?
I do and i can tell you it doesn't record poor quality video. It doesn't record as good as my Canon XM1 but then again there's about a £1,700 differential in price.
The Canon is pretty much redundant these days. Downscaling video from the XM1 for the web was becoming a pain in the A**e.
No my problem is that the article is even implying that he's spinning (read lying) based on the fact that there is a blank space where a camera was supposed to go and was probably pulled.
Logic holds and has been discussed many a time here is that the Touch is so popular because of its wireless internet capabilties (mail, Safari) and apps rather than its gaming. It's basically the iPhone without AT&T. I suppose we would only really know if Apple released percentage of games sold at the App store and that percentage of Touch buyers.
Peace.
The touch started out popular because of the internet capabilities but as Jobs so adequately put ""What customers told us was, they started to see it as a game machine," The key word there is "started." He isn't saying that ever since it started people were like OMGWTFBBQ those games are freakin' awesome. He's saying that people have STARTED to view it as a game machine so they made a bunch of commercials showing off the games and, true to Jobs' comment, the sales took off despite the shite economy. Could they have put a camera in there and charged the same amount and made almost the same? Probably but they would have had to redo the back case and create different shells for the 8GB and the 16/32GB and as we've seen with the iPhone they don't like doing that.
I've got a number of friends who have Touches and not a single one of them bought it for the wireless internet capability. They bought it for the 3rd party apps (read: games) and the music.
When the touch didn't have sh!t for 3rd party games of course people saw the internet as a huge draw because that's all it had but now that games are getting to the point of kickassery they see it as a portable gaming device and rightfully so.
There was some research done that showed that Touch users downloaded something like 2-3 times as many apps as the iPhone and considering the raw % of apps that are games I'd say touch users download a sh!tload of games.
The touch started out popular because of the internet capabilities but as Jobs so adequately put ""What customers told us was, they started to see it as a game machine," The key word there is "started." He isn't saying that ever since it started people were like OMGWTFBBQ those games are freakin' awesome. He's saying that people have STARTED to view it as a game machine so they made a bunch of commercials showing off the games and, true to Jobs' comment, the sales took off despite the shite economy. Could they have put a camera in there and charged the same amount and made almost the same? Probably but they would have had to redo the back case and create different shells for the 8GB and the 16/32GB and as we've seen with the iPhone they don't like doing that.
I've got a number of friends who have Touches and not a single one of them bought it for the wireless internet capability. They bought it for the 3rd party apps (read: games) and the music.
When the touch didn't have sh!t for 3rd party games of course people saw the internet as a huge draw because that's all it had but now that games are getting to the point of kickassery they see it as a portable gaming device and rightfully so.
There was some research done that showed that Touch users downloaded something like 2-3 times as many apps as the iPhone and considering the raw % of apps that are games I'd say touch users download a sh!tload of games.
I don't know- I've seen a lot of posts here and elsewhere where many are very disappointed that the Touch didn't get a camera. I haven't read any where someone's stating "OMGLWTF its the gaming device I've always wanted and more (finger stuck in cheek)!"
BTW- when the Touch does get its camera- what will the new reason be for it's inclusion into a gaming device?