Zune Swoons While iPod Rocks

Discussion
Nov 29, 2006

By George Anderson


Microsoft’s answer to Apple Computer’s iPod appears to be no answer at all, according to an IDG News Service report.


The Zune, as the Microsoft player is named, has received less than glowing reviews from critics and retailers alike. Sales have been disappointing, especially considering the hype Microsoft generated with Zune’s release on Nov. 15.


Gene Munster, a senior research analyst with Piper Jaffray & Co., said only eight percent of 40 retailers surveyed by the firm recommended the Zune while 75 percent pointed customers towards the iPod.


Somewhat startling was Mr. Munster’s report that a number of sales people responsible for MP3 players had not heard of the Microsoft product even though it was being sold in their stores.


“The buzz that Microsoft was able to generate for the Zune’s launch clearly helped the player in its first week, but much of the publicity took the form of Zune/iPod comparisons,” Mr. Munster wrote in his research note. Those comparisons showed the Zune “failed to match up in the eyes of most reviewers” to the iPod.


As of this writing, iPods represent six of the top 10 selling electronics products on Amazon.com. The Zune stands at 62 on the online retailer’s list.


Deutsche Bank analyst Chris Whitmore wrote iPods “appear to be immune to the Zune.”


Discussion Questions: If Microsoft can’t break into the iPod/iTunes market with this latest effort, will anything or anyone be able to do it? What
is Apple doing so well that others seem unable to rival?

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13 Comments on "Zune Swoons While iPod Rocks"


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Dan Gilmore
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Dan Gilmore
15 years 5 months ago

Microsoft’s success has been almost entirely in proprietary products where it is able to use leverage to capture huge, almost monopolistic market share.

Conversely, it has largely failed in every area where it is a “me too” product and/or faces stiff competition. You might cite the Xbox as an exception – except that it loses money on every unit sold. In fact, it recently warned profits may be down because it might sell MORE Xboxes than forecast!

This is especially true in areas that are from from its core — the msn.com, search and Zune all come to mind.

No one will topple Apple until that natural fashion cycle fades, as it must, and/or someone comes up with not an iPod knock off but something much different, better and “cooler.” That, the Zune is certainly not.

jared colautti
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jared colautti
15 years 5 months ago

Cowgill’s comments are bang on. The iPod rules because it is dead simple to use for both tech heads and the tech averse alike. Couple that with brilliant design and trendy advertising and you have a winning deal. That also explains why the superior players from Creative haven’t caught on.

The Zune, on the other hand, seems to have been made in a vacuum. It isn’t even compatible with Windows Media Player! It would be laughable if it weren’t so embarrassing.

Edward Herrera
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Edward Herrera
15 years 5 months ago

Technology is about being first to market, ease of use, coolness, and meeting the needs of the consumer. I believe the cell phone will eventually cover most of the needs of this consumer.

If Microsoft wants to move the iPod customer they will have to offer something new and exciting. Maybe Bluetooth technology?

Ed Dennis
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Ed Dennis
15 years 5 months ago

Unfortunately, Microsoft’s software model (a product that almost works) doesn’t cut it in the world of consumer electronics. A behemoth like Microsoft may have the financial clout to stay with this product until they get it right. (Radio – why, who listens to radio?) However, the iPod has already jumped from an Audio to an Audio/Video format. (I wonder if it will take advantage of Apple’s superior video software?) iPod will jump formats again and again, staying ahead of the competition all the while endearing Apple to the younger set who are beginning to buy Apple computers in greater and greater numbers. Apple’s claim to fame over time has been to produce products that work and do so in a elegant manner.

Kai Clarke
Guest
15 years 5 months ago

Too little, too late. Microsoft still can’t figure out the dynamics of the CE industry, let alone the value of “cool.” Their late entry into the MP3 party, at a premium price, is a double no-no. This is a losing proposition, and will continue to be until Microsoft adjusts the product positioning and pricing. There are other products which have tried to position themselves as “cool” and have lost, both in this product category and the CE channel. MS needs better guidance that to become successful in CE hardware, they need to develop better pricing, timing and panache. Going up against a well-developed company like Apple, with a firmly entrenched product is just that much difficult.

Bernie Slome
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Bernie Slome
15 years 5 months ago

Microsoft appears to be a day late and a dollar short on this one. Reminds me of when they wanted to enter the then crowded search engine arena (back in the days of Alta Vista, Lycos & Excite). It is a bad combination to be panned by the reviewers, late to market and perceived to not have additional value over iPod. Messers Gates & Balmer, go back to the drawing board.

Odonna Mathews
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Odonna Mathews
15 years 5 months ago

iPod’s success is the result of innovation, simplicity, customer satisfaction and positive word of mouth. It appeals to many age groups and types of consumers. To the competitors of iPod, “If you can’t swim, you will surely sink.”

Dick Seesel
Guest
15 years 5 months ago

The iPod vs. Zune battle reminds me of the conflict between the Betamax and VHS video formats years ago: The winner may not have the best hardware but is the one who establishes the biggest lead in software. In this case, the market for iTunes is already so huge that most MP3 users have too much invested to switch to a different player.

It doesn’t help Microsoft that many of the supposed file-sharing advantages of Zune have had well-publicized shortcomings…and that the advertising has been uninspired. As long as Apple continues to keep the iPod itself relevant through product development and great marketing, its head-start in software is like a moat protecting the castle.

Charles P. Walsh
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Charles P. Walsh
15 years 5 months ago
iPod is an iCon and will continue to be so until, surprise, a company launches a product which captures the youth market’s needs. While there is an argument that great marketing can create a demand and perpetuate it through peer-envy, it is much more difficult to do so on a consumer electronics item like the iPod. The iPod’s popularity is built not on a passive experience such as is experienced by trendy clothes, jewelry and so on, rather it is built upon an interactive experience in both form and function. iPod is elegant in its simplicity, appealing in its youthful high tech appearance and it works pretty darn good in delivering on its core promise to easily download, store, and play tunes. Supporting the products image is Apple’s incredible marketing machine, its engineered obsolescence planning and introduction of new models every two years. This maintains its momentum and mystique in the marketplace. Someone, someday, will knock the Apple off its tree — this is inevitable — but until then, it is simply a matter of… Read more »
Adrian Weidmann
Guest
15 years 5 months ago

Mr. Cowgill’s comments are spot on! Let’s not forget that nothing beats a great product and an easy transaction delivering an emotional customer experience. I am delighted that Apple has finally been able to secure a position where Microsoft’s heavy marketing cannot simply undermine a great product and service. The iPod delivers the full experience to its customers and in turn they have embraced the Apple brand and the IPod. A recent report suggests that The Beatles and Apple have reached an agreement in their long standing dispute over the Apple logo that includes an exclusive online distribution agreement of The Beatles catalogue through iTunes.

Mark Lilien
Guest
15 years 5 months ago

Zune’s only major advantage isn’t enough (sharing music with your friends for 3 days). When you’re the me-too late entry, you need to be much better. Zune isn’t. And if your product isn’t special, your advertising has to be absolutely phenomenal.

Zune’s ads aren’t.

Peter Fader
Guest
15 years 5 months ago

The darn thing is that there are some really cool devices out there — with way better user experience aspects than the iPod — that no one has heard of. My daughter dumped her iPod in favor of the Sandisk-Rhapsody device/service and she loves it. her friends are starting to switch too, but none of them would know about it if not for me. Likewise, another cool device is the Music Gremlin (which is basically the Zune done right).

Unfortunately people are either brainwashed by Apple and/or duped by Microsoft, so these smaller players just can’t get much traction.

Race Cowgill
Guest
Race Cowgill
15 years 5 months ago

From how this topic is discussed you would almost think there were either some kind of magic involved, or that it’s all about marketing. Neither is the case, in my view. iPod took off because it gives consumers a music-management and playback experience they want and need, in a package that is innovative, smart, and elegant. This has been Apple’s approach for a long time. It is not enough to “muscle” into a market with heavy and hype-y advertising, especially if your offering is clunky and inconvenient. It is kind of amazing, really, that business keeps forgetting this.

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