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Zune: Clock ticking on Microsoft’s last chance?

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Monday, September 18, 2006
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Last week was busy. Busy enough with the release of two new iPods that we basically worked straight through Microsoft’s launch event for the Zune. So now that our reviews of the new iPods are out of the way, here are some of our thoughts on what took place last week, prefaced with a short explanation.

Every time one of our Zune-related articles gets linked by certain sites, we receive a not-too-mysterious influx of first-time commenters who post robust thoughts like, “gahhhhhh!!1!1!! with a name like iSomething you must be biased iPod fanboyz so shut up!1111!,” “c’mon give microsoft a chance they is the true innovators and mac is the thiefs!,” or “my ipod broke after 6 minutes and i could not get it to work thank god for bill gates vista will be the best.” Comments like these are often laugh-out-loud funny, in part because of the bizarre content, but also because we know they’re sometimes being written by “astroturfers” - as we’ve discussed elsewhere on the site, these are marketing toadies who are paid by companies to create fake grass roots buzz or negative buzz, sometimes including attacks on people who cover their products with anything less than a soft touch.

Sure, the astroturfers won’t actually read this, but if you’re wondering whether we’re “biased cause we ‘r’ the ipod fanzz,” let’s take a brief trip down memory lane to August. That’s the month when we unveiled accurate artist’s renditions of the Zune’s interface, provided accurate descriptions of its features, and so on. You may even recall - if not, go look - that our first Backstage article on Zune gave Microsoft “cool” credit for numerous features, including the general UI, scrolling, big album art, and integrated radio. We even said that the Wi-Fi feature was a cool idea, though it was unlikely to be practical for the time being. Uncool elements? Obvious ones; the bigger-than-iPod size and the faux Click Wheel, which most people have agreed aren’t great parts of the design. So call us biased or whatever you want, but we had the first words on the real features inside Zune, and we didn’t slam it - we praised what deserved praise and pointed out the flaws that everyone else is now pointing out, too.

Having said that, we’re not going to be Limbaughed into muting or moderating our legitimate feelings on Zune out of fear of being labeled as biased; that’s exactly what the astroturfers want. Just like our original reports, which panned out as expected, we provide factual information alongside our opinions, then trust the majority of our readers to be intelligent enough to make the choice as to what’s right for them. Whether you agree or disagree, great - our comments sections are here for you to share your views - but don’t think for a second that our opinions are foregone conclusions. We haven’t been half as negative about Zune or Microsoft as most of the press is these days.

So, here are our thoughts now that Zune is officially out of the bag. First, the announcement was far from the big, wow-ing event that one would expect from a company poised to blow billions of dollars on a new product launch: the world was expecting Janet Jackson at the Superbowl, not Tito Jackson at the Sands in Vegas. Instead of coming across as original or surprising, Microsoft’s timing (right after Apple’s Showtime event), tough-guy rhetoric (the iPod is “the Pong or Model-T of digital music,” sayeth J Allard), media padding (all-expenses paid trips for a bunch of music bloggers such as 3hive), and failure to deliver key details (pricing and availability) were all woefully familiar signs pointing to “more of the same.” If you’re going to bring a bunch of people to a launch event and tell them that your technology supposedly makes someone else’s super-popular alternative seem primitive, you can’t leave them wondering about the practical stuff - “why do I really need this,” “how much am I going to pay for it,” and “when can I get it?”

Now, contrary to the most polar views out there, Microsoft as a company isn’t “all bad.” Knock it all you want, but Windows XP’s market share strongly suggests that Apple been blundering its OS X sales pitch for years, and there’s absolutely no question that the iPod wouldn’t have gained market leadership without winning over PC users. Even die-hard Mac fans have to acknowledge this. And with both the Xbox and Xbox 360, Microsoft has delivered game consoles that were legitimately class-leading in performance and features. Thanks in no small part to massive tactical blunders by Sony, Xbox 360 has emerged as the top “next-generation” console of its class (whether it’s the next 3DO or PlayStation, you decide), even though it initially suffered from some serious heating and/or power problems and was draped in some laughably bad marketing (see the MTV unveiling - ouch).

But as Xbox 360’s dismal performance in Japan demonstrated, Microsoft is shockingly tone-deaf on learning from its biggest mistakes - instead, it repeats them over and over again, leaving commentators wondering just how many times the same people can fail at the same tasks without reprisals there. Make a machine too big? The next one will be, too - just try and convince people that’s what they wanted. Code too bloated? Just wait for the next version. Right now, Zune sure seems like it’s on that path. Remember Plays For Sure? It won’t play on Zune. Why? You tell us, but honestly, would you ever buy digital music from a company that shifts its DRM standards every year or two? Then there’s the whole “we repackaged a Toshiba Gigabeat” thing - now, in brown. And the fact that Microsoft is again trying to convince journalists that “more stuff inside” equals “better.”

From all of these errors, you’d think that Microsoft hadn’t been around for the past two years when all of Apple’s competitors were being shot dead, quick-draw style, bleeding money before their few remaining stocks of inventory were being swept away into discount bins. But Microsoft most certainly was around, watching all of its “partners” absorb all the bullets while it stood in the background, making snotty statements about how the iPod’s success wouldn’t last. What explains the apparent failure to learn? Well, the Zune team is from a different Microsoft division. And don’t forget, as we mentioned a few weeks ago, there’s yet another, totally different “big deal” Microsoft product from another division being shown in January. And it’s not part of the Zune family.

In our view, the thing that’s going to hurt Zune the most right now is pricing. Sites are reporting that Apple caught Microsoft by surprise with the $249 enhanced 30GB iPod - a great strategic move, for consumers, too - and forced the new team to change its Zune pricing strategy at (well, after) the last moment. Our prediction: if Zune sells for two dollars more than the 30GB iPod, rebates or no rebates, it’s going to be in a lot of trouble come this holiday season - the magic numbers for volume MP3 player sales are $250 and below, and Apple’s about to own that market again with both flash- and hard disk-based players. Even if Zune could sell for $250, would anyone want something bigger than an iPod with clunkier controls and less battery life? Microsoft has one last chance to get this right, so we’re going to be very interested to see whether it can get back on track again quickly, or whether Zune will be DOA at whatever price and date it arrives.

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Comments

1

I think you nailed it in that pricing will hurt them, but I think not supporting the existing WMA music stores is equal in…umm…badness.  smile  If it was cheap, but did not support existing music stores or collections, one could justify it on price.,  If it were expensive but supported all your PlaysForSure stuff, then you could say ‘Well, sure it;s $50 more, but I already have all this music and I like Napster/Urge/whatever.”

But BOTH expensive and not supprting PlaysForSure?  It’s suicide.  Plus no one has really had their hands on the Zune app yet as far as I can find.  If it doesn’t out-perform iTunes, no one will even consider this thing.

Of course, this is version 1.  MS said they are in this long-term, so maybe they’ll be more receptive and responsive to consumer demand than Apple, who couldn’t care less what we want.

Posted by stark23x on September 18, 2006 at 9:51 PM (PDT)

2

Other than pricing, the thing that might kill Zune is the general reluctance of Windows users to be early adopters. We’ve learned over time that being bleeding edge with Microsoft products guarantees a messy self inflicted wound.

Posted by Aceon6 in New England, USA on September 19, 2006 at 9:39 AM (PDT)

3

I think MS’s best chance is to integrate this device with Xbox.  I really don’t see why someone would choose this over even a Zen player.

Posted by Ben on September 19, 2006 at 10:36 AM (PDT)

4

Why they don’t just back Sandisk I’ll never know. Give them access to the marketing machine, something like that.

Posted by Liam on September 20, 2006 at 2:12 PM (PDT)

5

One of microsoft’s marketing execs has all but “officially” confirmed the price at 230$, they also keep saying that the firmware will be updated soon with game support such as xbox 360 arcade games, while I think it was a bad move not supporting plays for sure I think giving you all the songs you’ve bought in itunes (and some other services) for free will more than make up for it. While I agree that we should wait to see the initial response (christmas) I’m definetely looking forward to picking one up. btw it comes integrated with xbox, it can play videos and music on your tv, then again it can also do this through a dvd player with the home kit.

p.s. I make as many blue screen of death jokes as anybody else but this time microsoft might just nail it.

Posted by kikuko on September 21, 2006 at 12:27 PM (PDT)

6

$230??? I suggest you read THIS article regarding an interview with the well-respected blogger Mike Evangelist:

Zune Secret Marketing Strategy?

$99 for a 30GB Zune…small wonder MSFT has been stating it would take half a decade to make money on this project, if this speculation is anything close to true. One thing’s for sure, it’s a SUREFIRE way of stealing sales from a $249 iPod, and generating some serious noise for the Zune.

Posted by flatline response on September 22, 2006 at 10:24 PM (PDT)

7

Ok it’s going way down tha countery side. But the thing i want to share like i bought 4 different ipods in 3 years and i had serious problem with three of them one was U2 special edition and it’s right lower side bend whenever i put my fingers on it. So i return that and then i bought ipod mini When i hooked up with my pc for almost 4 hours(charging) and after when i start lisning music on it. It dead after half hour. I mean it was showing only battery and apples sign. Anyway i return that too. After i bought 5G ipod and it’s fine. Anyhow Zune is not out yet and some peoples talking agnt zune like they use it. I don’t know much about what’s going on between Apples and Microsoft but i will buy Zune as soon it’s comes out. Just for exp maybe but i want to check it and it may works.

Posted by Eskay on September 24, 2006 at 7:23 PM (PDT)

8

I found this article’s comments concerning the ‘turfers’ about as true as it gets. What I personally found yesterday at sears.com was the next phase of the ‘cornering the market’ exploits of Microsoft for their Zune. Last week I was thinking of buying a new ipod and found sears offering some really nice online prices, lower than I was finding anywhere else, should have bought it then though. This week a search for “ipod” on the sears sight brings up three zune players and ipod accesaries only. Can’t find an ipod on any sears related site anywhere.

While I understand brand marketing, company specific marketing etc. I found it illogical to show three examples of a new product with no available accesaries; right next to 76 accesaries for a product you carried up until this week when you began carrying a new line.

I’m sure sears won’t be the only one doing it, and personally I’m starting to really look for more sales from those other companies trying to get rid of ipods in replacement for what I’ll presume to be highly ‘subsedized’(sp) Zunes trying to grab market share.

Posted by TxOcelot on November 1, 2006 at 7:58 AM (PDT)

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