Zune: Clock ticking on Microsoft’s last chance?

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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