Microsoft's Zune said to be more bark than bite
Microsoft's upcoming Zune digital media player appears to be little more than a repackaged Toshiba Gigabeat player, which itself has enjoyed only marginal success, one Wall Street analyst says.
Recently, specs and photos of the highly-anticipated Zune device turned up through FCC filings and other industry sources, offering industry analysts and pundits alike a glimpse of what Microsoft has in store for this year's holiday shopping season. However, few have are impressed with the device.
"While we have great respect for Microsoft, we are frankly underwhelmed by the much-hyped Zune device," American Technology Research analyst Shaw Wu told clients on Wednesday. "It appears that the Zune is essentially a repackaged Toshiba Gigabeat that has seen limited success."
In a research note, Wu said Zune shares similar characteristics to other would-be iPod knockoffs, which have so far failed to chip away at Apple's dominant share of the digital media player marker.
"Like the Chocolate phone from LG and other vendors, the Zune includes a fake click-wheel that does not scroll nor is touch pressure sensitive making navigation difficult, particularly for users with large music, video, and photo libraries," he said. "We find it interesting that Microsoft also opted to replicate an iPod-look like most others, but failed in replicating one of the key pieces of the unique iPod experience with its scrolling click-wheel and powerful catalog engine."
Wu continues to believe that replicating the iPod + iTunes digital franchise is an extremely difficult endeavor in which most competitors are unlikely to succeed without infringing on Apple's patents. Of all the companies challenging the iPod, he believes Sony has come the closest to creating a pleasant experience with its Walkman cell phones. Still, he notes that the success of the Walkman phones have had little impact on Apple's ability to maintain and grow its share of the market.
In his note to clients, the analyst also questions Microsoft's decision to target Zune only at the high-end digital media player market, which accounts for only 20 to 25 percent of the players sold.
"Microsoft appears to be targeting the high-end space with its $300 pricing, 30GB microdrive storage, Wi-Fi capability, and FM tuner," Wu said. "While this makes sense to aim after Apple's dominant video iPod, we believe Microsoft is leaving out 75 to 80 percent of the market opportunity in the midrange and low-end that is currently dominated by iPod nano, iPod shuffle, SanDisk, and Sony Walkman phones."
In the analyst's opinion, Microsoft's entry into the digital media player market is akin to waging a civil war with its partners. He says it pits the company in direct competition with its friendlies that have supported its Windows Media format.
"While the focus is on Apple, we believe this move will likely have a much larger competitive impact on Creative, SanDisk, Sony, Toshiba, Samsung, iRiver, Archos, and others," he said. "We believe Microsoft's action could also make partners think twice before deciding to work with Microsoft on future projects."
Wu sees the digital media player market as divided into two camps: iPod + iTunes and Windows Media.Â* While he believes Zune will likely see some success due to Microsoft's strong brand name and strong marketing effort, he believes that success will be limited by its lack of differentiation versus other Windows players.
"We believe iPod + iTunes is positioned to be the Walkman of the portable media space," Wu wrote in conclusion. "Walkman maintained its dominance over a 15 - 20 year period despite countless competitors trying to create a 'Walkman killer.' We believe iPod = Walkman for the 2000s."
Wu maintains a "Buy" rating on shares of Apple Computer with a price target of $75. The analyst does not provide coverage of Microsoft.
Recently, specs and photos of the highly-anticipated Zune device turned up through FCC filings and other industry sources, offering industry analysts and pundits alike a glimpse of what Microsoft has in store for this year's holiday shopping season. However, few have are impressed with the device.
"While we have great respect for Microsoft, we are frankly underwhelmed by the much-hyped Zune device," American Technology Research analyst Shaw Wu told clients on Wednesday. "It appears that the Zune is essentially a repackaged Toshiba Gigabeat that has seen limited success."
In a research note, Wu said Zune shares similar characteristics to other would-be iPod knockoffs, which have so far failed to chip away at Apple's dominant share of the digital media player marker.
"Like the Chocolate phone from LG and other vendors, the Zune includes a fake click-wheel that does not scroll nor is touch pressure sensitive making navigation difficult, particularly for users with large music, video, and photo libraries," he said. "We find it interesting that Microsoft also opted to replicate an iPod-look like most others, but failed in replicating one of the key pieces of the unique iPod experience with its scrolling click-wheel and powerful catalog engine."
Wu continues to believe that replicating the iPod + iTunes digital franchise is an extremely difficult endeavor in which most competitors are unlikely to succeed without infringing on Apple's patents. Of all the companies challenging the iPod, he believes Sony has come the closest to creating a pleasant experience with its Walkman cell phones. Still, he notes that the success of the Walkman phones have had little impact on Apple's ability to maintain and grow its share of the market.
In his note to clients, the analyst also questions Microsoft's decision to target Zune only at the high-end digital media player market, which accounts for only 20 to 25 percent of the players sold.
"Microsoft appears to be targeting the high-end space with its $300 pricing, 30GB microdrive storage, Wi-Fi capability, and FM tuner," Wu said. "While this makes sense to aim after Apple's dominant video iPod, we believe Microsoft is leaving out 75 to 80 percent of the market opportunity in the midrange and low-end that is currently dominated by iPod nano, iPod shuffle, SanDisk, and Sony Walkman phones."
In the analyst's opinion, Microsoft's entry into the digital media player market is akin to waging a civil war with its partners. He says it pits the company in direct competition with its friendlies that have supported its Windows Media format.
"While the focus is on Apple, we believe this move will likely have a much larger competitive impact on Creative, SanDisk, Sony, Toshiba, Samsung, iRiver, Archos, and others," he said. "We believe Microsoft's action could also make partners think twice before deciding to work with Microsoft on future projects."
Wu sees the digital media player market as divided into two camps: iPod + iTunes and Windows Media.Â* While he believes Zune will likely see some success due to Microsoft's strong brand name and strong marketing effort, he believes that success will be limited by its lack of differentiation versus other Windows players.
"We believe iPod + iTunes is positioned to be the Walkman of the portable media space," Wu wrote in conclusion. "Walkman maintained its dominance over a 15 - 20 year period despite countless competitors trying to create a 'Walkman killer.' We believe iPod = Walkman for the 2000s."
Wu maintains a "Buy" rating on shares of Apple Computer with a price target of $75. The analyst does not provide coverage of Microsoft.
Comments
1. Admitting M$ as a failure, says that they are also failures for buying into it.
2. They just have too much invested, and needs M$ to pull it together or they are bankrupt.
3. They are just stupid sheep, and always will be.
4. They count on a paycheck from M$ employment or related services.
Argue that.
"While we have great respect for Microsoft, we are frankly underwhelmed by the much-hyped Zune device," American Technology Research analyst Shaw Wu told clients on Wednesday. "It appears that the Zune is essentially a repackaged Toshiba Gigabeat that has seen limited success."
well, before dismissing the zune as just a "repackaged gigabeat", I'll just wait until i try it at a best buy. all we have so far is blurry pictures of purported zune devices on styrofoam blocks.
The only reason people don't admit Micro$oft is a completely failed company, is because of one of more of the following:
1. Admitting M$ as a failure, says that they are also failures for buying into it.
2. They just have too much invested, and needs M$ to pull it together or they are bankrupt.
3. They are just stupid sheep, and always will be.
4. They count on a paycheck from M$ employment or related services.
Argue that.
While it's apparent that Microsoft has made a ton of mistakes of late, it's really difficult to argue that they are a failed company. It's difficult to argue that any company with the command of the market that they own is failed.
While it's apparent that Microsoft has made a ton of mistakes of late, it's really difficult to argue that they are a failed company. It's difficult to argue that any company with the command of the market that they own is failed.
Because it has popularity, does not mean it is good, or rightly.
The only reason people don't admit Micro$oft is a completely failed company, is because of one of more of the following:
1. Admitting M$ as a failure, says that they are also failures for buying into it.
2. They just have too much invested, and needs M$ to pull it together or they are bankrupt.
3. They are just stupid sheep, and always will be.
4. They count on a paycheck from M$ employment or related services.
Argue that.
Okay.
1 - The major goal of Microsoft is to make money
2 - They typically average around 3 billion USD profit per quarter
That's a failure!?
The proved to be popular, but not good or rightly.
Today is no different, and Microsoft is the king of deception (Excluding government and the media), and Microsoft is a master at keeping you as a customer.
But they are not good, and not rightly.
Eventually they will pass.
...so far failed to chip away at Apple's dominate share...
Just a note. The word is "dominant", not "dominate" ("dominate" is a verb). I've seen this mistake repeatedly on this site so I thought I'd mention it.
Okay.
1 - The major goal of Microsoft is to make money
2 - They typically average around 3 billion USD profit per quarter
That's a failure!?
Successes are measured differently. If Money and wealth determines your success, and it doesn't matter how you achieve it, (The end justifies the means), then they are in fact successful.
Just a note. The word is "dominant", not "dominate" ("dominate" is a verb). I've seen this mistake repeatedly on this site so I thought I'd mention it.
Although you are obviously correct, it won't help.
I think no matter how good a newly released mp3 player is today it is pretty much too late. The iPod has come to define mp3 player and hopefully Apple will keep on re-defining it. It's time for all these tech companies to put their brans and money into the next big thing.
Amen.
In early human history, there were people of all sorts selling "Snake Oil" products. Or in other words, things and remedies that were designed knowingly to deceive the purchaser into buying something they knew would not work as advertised. These people and their products were the popular, as everyone was using them.
The proved to be popular, but not good or rightly.
Today is no different, and Microsoft is the king of deception (Excluding government and the media), and Microsoft is a master at keeping you as a customer.
But they are not good, and not rightly.
Eventually they will pass.
If that's supposed to be some form of rebuttal, it's a bit weak...
You claim that Microsoft will die because they are "unethical" in their advertising.
Yet, visit any market in a 3rd world country, and you will still find people selling the things you mentioned. And the government and media are more powerful than ever.
In fact, looking at the "evidence" you've given, it would seem Microsoft is here to stay for a looong time.
Perhaps they will lose some market share over the years, but they will not die, at least for the foreseeable future.
Nothing "New" here. Just the same old stuff, with a different face. Kinda like "Vista". Or should I say XP sp4 instead.
Successes are measured differently. If Money and wealth determines your success, and it doesn't matter how you achieve it, (The end justifies the means), then they are in fact successful.
You are stretching the analogy. Maybe you would like to argue that Betamax was a success? Microsoft is clearly a successful company as a whole whether or not you like it. Several of their initiatives have failed, but that happens with any company.
Frankly, all your posts so far smell of rampant fanboyism. If you don't like the evidence, you reframe the argument. You also are taking this "repackage" rumor as a fact.
Successes are measured differently. If Money and wealth determines your success, and it doesn't matter how you achieve it, (The end justifies the means), then they are in fact successful.
Well, not to pick on you or anything...
But since it's probably fair to assume Microsoft does measure its success via profits, didn't you just contradict your first comment?
If that's supposed to be some form of rebuttal, it's a bit weak...
You claim that Microsoft will die because they are "unethical" in their advertising.
Yet, visit any market in a 3rd world country, and you will still find people selling the things you mentioned. And the government and media are more powerful than ever.
In fact, looking at the "evidence" you've given, it would seem Microsoft is here to stay for a looong time.
Perhaps they will lose some market share over the years, but they will not die, at least for the foreseeable future.
Not that they are unethical in their advertising, as you concluded, and not that they are leaving anytime soon, but that their dominance in this technological age will fade away, as it is starting to now.
Remember Chaos before order.
And I really was not giving you a rebuttal, but more of an observation as a reminder to all those people that seem to think they are indestructible.
As much as I loth Microsoft, I feel for their ignorance and arrogance. It seems that with their complete dominance in the market, and all of their money and resources, that they could seemingly easily maintain that for centuries. But their lack of innovation and invention, and lack of company focus and greed are becoming their downfall. One cannot hardly argue that if Steve Jobs (or someone like him) were to be the successor to Bill Gates as CEO for Microsoft, that Micro$oft would do a 180 degree turn, and most likely maintain their dominance for many years to come.
MS gets all that.
The only reason people don't admit Micro$oft is a completely failed company, is because of one of more of the following:
1. Admitting M$ as a failure, says that they are also failures for buying into it.
2. They just have too much invested, and needs M$ to pull it together or they are bankrupt.
3. They are just stupid sheep, and always will be.
4. They count on a paycheck from M$ employment or related services.
Argue that.
What an utterly stupid post. You're 14 right?