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July 24, 2006

Zune is Coming, Will Anyone Care

Microsoft confirmed rumors last week that the company was indeed developing an iPod rival device and music service called Zune.  Details are sketchy as to what this means in terms of a consumer experience in general and as an alternative to iTunes.  Microsoft is trying to create a buzz here, both with a blog and a web site.  The blog features enthusiastic reader comments about Zune, as if the world has never seen anything quite like this before.  It is honest, however, in that someone did post a comment about how they must all be fakes as the responses were not just positive, but really POSITIVE in an unnatural way. 

The web site is another matter.  Once past the musical interlude opening ("Us" by Regina Spektor) there is a place to enter one's email address.  Below that is a check box supplying an option to receive a Zune newsletter.  One can't proceed (assuming there is anything to proceed to) without supplying an email address and checking the box.

The few details that have come out include Zune being hard drive based and with Wi-Fi access.  Microsoft envisions the device as computer independent, although no word on whether it will be platform independent.  There have been suggestions that the track pricing will vary, something the music labels have lusted after since they joined up with (and frustrated by) Apple.  Zune owners should be able to use the Wi-Fi feature to share tracks to some degree, share playlists and buy music directly to the machine.  There are also rumors that it will have some game playing ability, as a portable xBox.  It might play video as well.

The murky (read unknown) details include will it work on Apple as iTunes works on Windows; will consumers be able to burn tracks to CD; will file formats be limited; will it play native and wildly popular MP3 format, whether consumers can transfer existing CD tracks to Zune.  Then there's the question of unit pricing.  Will Microsoft hopelessly load the unit with features no one needs just to appeal to every possible market segment?  Can Microsoft develop a cool factor for Zune that can seriously challenge the iPod and iTunes.  Will we see DJs in clubs using dual Zunes to mix?  Or will the DRM just get in the way.  Microsoft does have problems with the vision thing When cultural aspects are involved.  Apple set their system up to work with consumers as they would.  Microsoft created its DRM system to cater to music labels and movie studios assuming the sheer force of distribution would change consumer habits.  Market shares show that it doesn't always work that way.

What this development means to the new Urge service Microsoft started with MTV and the host of partners Microsoft has in the Plays For Sure (maybe) program is anyone's guess.  Initial comments suggest that these Windows-based players will see market share loss before Apple does.  Consider that Zune is now officially coming, would you buy a Creative or iRiver product while waiting to see what this puppy can do?  Let the fear, uncertainty, and disinformation (FUD) flow.  It won't affect Apple, at least in the short run.  Their sales model has proved to work.

July 24, 2006 | Permalink

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