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Microsoft CEO claims Zune market share, laughs at iPhone

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By LC Angell

Contributing Editor
Published: Thursday, January 18, 2007
News Categories: Digital Media

Microsoft CEO Steve Ballmer claims that his company’s Zune media player took 20% of the high-end digital audio player market—those devices priced $249 or above—following its debut in November. Ballmer’s estimates compare to those of the NPD Group, which said this month that the Zune accounted for only 2.8% of the total digital audio player market in the five-week period from Nov. 19 to Dec. 23.

“We came into the market, a market in which they are very strong, and we took, I don’t know, but I think most estimates would say we took about 20-25% of the high end of the market,” Ballmer said in a CNBC interview. “We weren’t down at some of the lower price points, but for devices $249 and over we took, you know, let’s say about 20% of the market. So, I feel like we’re in the game, we’re driving our innovation hard and, uh, okay, we’re not the incumbent, he’s the incumbent in this game, but at the end of the day, he’s going to have to keep up an agenda that we’re gonna drive as well.”

Characteristically, Ballmer also laughed at Apple’s iPhone and its premium pricing. “$500 full-subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine,” Ballmer said. “Now, it may sell very well or not, I, you know. We have our strategy, we’ve got great Windows Mobile devices in the market today. You can get a Motorola Q phone now for $99, it’s a very capable machine, it’ll do music, it’ll do Internet, it’ll do email, it’ll do instant messaging. So, I kinda look at that and I say, well, I like our strategy. I like it a lot.”

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Comments

41

Gino: Yeah, that’s why the Zune is getting terrible reviews. That’s why the Zune sold 1/50th of what the iPod sold this Christmas. That’s why the Zune is the size of a blimp and won’t fit in my pocket. That’s why the Zune comes bundled with buggy software that uses “Microsoft points” to buy music, thats why. Yeah, the Zune is way better than the iPod.

The only thing I fear about the Zune is that terrible, ugly brown color and how they manage to make the white one look even worse.

I think Ill stick with my iPod and have something that works and can fit it my pocket, thanks.

Jerk.

Posted by Brent on January 18, 2007 at 9:11 PM (PDT)

42

he could work on his speaking.

Posted by mrmojorisingi on January 18, 2007 at 10:51 PM (PDT)

43

About the iPhone:

Ballmer said we have our strategy, but I can’t help to think back on their PlaysForSure strategy. They did an about face and is now copying Apple’s strategy of a ‘closed’ more controlled ecosystem.

Posted by daveworld on January 18, 2007 at 11:23 PM (PDT)

44

Sadly I see people with Zunes nearly every day—of course the only reason I see them is because the bus I take to work goes right by Microsoft, and all those minions with their Zunes are getting off at that stop. Gotta give them credit for taking pride in their company’s products, no matter how awful they are. I always have a good time seeing people’s faces on the bus when I open up my Macbook Pro amongst the throngs of generic-looking Dells…

Posted by Daniel James on January 19, 2007 at 1:42 AM (PDT)

45

it is sexy but it takes way too many hoops to jump through to get this thing. like a mail order bride.

Posted by tard on January 19, 2007 at 3:28 AM (PDT)

46

Yes, the iPhone has a virtual keyboard when you want to send emails

Posted by Alex Chin on January 19, 2007 at 5:21 AM (PDT)

47

I wonder if you will be able to hold the iphone horizontally and use the virtual keyboard or if it only works held upright like a phone.
I checked out the Zune at the store and I the interface was pretty confusing - but I have to say that the screen graphics were pretty cool looking.The device itself felt large and awkward though.
Still I love my ipod even though its a 3rd Generation 40 Gig (Over 3 years old and still work fine)! If they come out with an ipod that is similar to the iphone with coverflow I will upgrade!

Posted by Neal on January 19, 2007 at 7:23 AM (PDT)

48

the more you apple fans hate the zune, the better it is. You hate it sooooo much because you fear it.  It’s just better than the ipod.  face it.

Hey Gino, thanks for clearing this up. I was thinking that I disliked the Zune because, like all MS products, it’s derivative, pays too much attention to looking good (instead of being good), and assumes it’s better/smarter than me (I can’t beam the MP3 I made of my daughter’s band concert? How is that protecting the @#$@#$ who run the RIAA???).

Posted by paul on January 19, 2007 at 7:23 AM (PDT)

49

Apple sells it like it’s sex.  Microsoft sells it like it’s a chore.

I’m so confused. My wife thinks sex is a chore. Does that mean she’d like a Zune?

Posted by Don'tMindMe on January 19, 2007 at 7:29 AM (PDT)

50

Maybe he meant to say 2.0% instead of 20%.

Posted by Dave on January 19, 2007 at 7:38 AM (PDT)

51

Zune 20%, does he think people are stupid? I think nothing can replace the ipod in the short term, it is almost perfect (just almost because the scratches and the screen). I am not a Mac fanboy, I am a windows user, and although I think Mac OS is more beautiful than Windows XP (and for now more secure), I do not like the close system in computers.

Posted by JaRa76 on January 19, 2007 at 9:16 AM (PDT)

52

“Ooops, he did it again…”

I don’t think I can never ever hear an intelligent remark from him, ever.

Bill Gates must be right now vomitting blood and wondering what has he done, to make him (Balmer) his successing CEO…

Posted by howwow on January 19, 2007 at 9:34 AM (PDT)

53

Let Ballmer rant.

The more idiotic public comments from Microsoft, the sooner the market will see a no-phone, touch-screen, video iPod that will make the Zune a minor footnote in tech history.

Posted by Scooter on January 19, 2007 at 9:36 AM (PDT)

54

Keep the Apple fanboy stuff down, guys… sheesh.  Let’s wait until the next “video” iPod and see how that compares to the Zune.  Zune many not be as sexy physically, but the UI is great and it has unlimited subscription content with better sounding 192Kbps audio… which is a great idea Apple should go for!

I imagine the next video iPod will have a better UI… maybe like the iPhone.

Posted by sonicbox on January 19, 2007 at 5:12 PM (PDT)

55

and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine,”


what an idiot..cough cough smile

Posted by Livjeet on January 19, 2007 at 8:22 PM (PDT)

56

the question is not weather or not steve ballmer is right, its weather he’s on cocaine.

http://youtube.com/watch?v=wvsboPUjrGc

Where does he get off, not wearing a black turtle neck and being called steve. a pallid immitator, and with no products to back him up….

Posted by rafe on January 20, 2007 at 1:22 PM (PDT)

57

Hmm… is that a typo or Freudian slip in dness’ comment -

“When the PSP was released it appeared in the Subway overnight.

Maybe their only being used around Settle?”

“Settle” seems like the perfect choice when discussing a Microsoft product to me, but I guess it could be a typo smile

Mind you, “their” should still be “they’re” wink

Posted by tclnj on January 21, 2007 at 6:56 PM (PDT)

58

Sorry Microsoft, your 20% of the high-end digital audio player market is equal to ZERO % here in Canada cause it’s not available here up north!

No Zune for sale, meant that I did what I thought I’d never do: I bought an iPod nano, and got it cheap on boxing day!

Posted by Alex Leung on January 21, 2007 at 10:18 PM (PDT)

59

There are two things to note here:

Steve Ballmer might be super-rich, but he will always be a sycophantic tool.

He is the CEO and given that MS is a public company with shareholders and an overseeing board, he HAS to trump up MS and its own devices (while also deriding the biggest).

I could only imagine what Ballmer must have said internally to himself when he not only saw iPod’s sales figures during the recent Q4 announcement, but also when he saw / heard of the iPhone:

“O sh…  we’re screwed, but of course I can’t let that on…”

“Now why can’t we innovate like that… why can’t we get talent like that… why, why WHY?”

“It’s all on Vista… if Vista tanks…”

“the iPod and the iPhone are amazing…. unbelievably great… wow”

“I gotta make a quick call to our reps who handle our PR agency and see how we can spin our sales figures and estimates NOW”

“Who cares anymore… everyone knows MS are out of the race… just keep the shareholders happy and we’ll all get paid handsomely.  In fact, I will probably lot another few million within the next year”

“If Apple releases their rumored tablet, the Origami project is ruined for good…”

“I have to lie…  I have to lie and convince others that we’re OK”

Makes me chuckle.  Sony never learned and they blew huge opportunities.  MS hasn’t had any innovations since Windows 95. 

And the best part:
I’ve been reading about how Vista may not have the cache it once had… especially with OS X getting all the praise.

Posted by Chris G on January 22, 2007 at 5:40 PM (PDT)

60

Hey i love Nintendo and its 64!!!

Nintendo is a good company that makes things fun, Microsoft is not fun! how do they compare?

I got myself a Wii yesterday!!! And I will be getting my wife the iPhone when it comes out.

But, Gino got a point! Maybe I will sell my Wii, iPod, and DS and stock up on Zunes!!

Posted by marcnkarin on January 26, 2007 at 6:40 AM (PDT)

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