The end of Zune? It's not just the music anymore

The end of Zune? It's not just the music anymore

Summary: Is this the beginning of the end for the Microsoft Zune? In a story about Microsoft's quest to beat Google, the Financial Times writes that Steve Ballmer seems "all but ready to throw in the towel on the Zune," which hasn't come close to being an iPod killer.

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Is this the beginning of the end for the Microsoft Zune? In a story about Microsoft's quest to beat Google, the Financial Times writes that Steve Ballmer seems "all but ready to throw in the towel on the Zune," which hasn't come close to being an iPod killer. The piece hints that Ballmer is more interested in the music player business from an angle that Microsoft knows well - software.

As products like the iPod Touch and iPhone hit the scene - as well as the Blackberry Storm and other smartphones with media playback capabilities - it appears that the push is toward general purpose devices that can not only play music but can also run apps over a WiFi or 3G connection. Like making phone calls, playing music becomes simply one element of a device - not its sole purpose. That's not to say that anyone should expect a Zune phone anytime soon. Ballmer tells the FT: "You should not anticipate that" but adds that the company will stick to its strategy of developing software for a range of mobile devices.

Also see: Mary Jo Foley: Microsoft to wait until February for Win Mobile show-and-tell

Are partners willing to stick by Microsoft in this space? After all, weren't partnerships the core of that short-lived "Plays for Sure" initiative, the one that's become "Certified for Windows Vista." plays for sureSome argue that partners like MTV pulled the plug on Urge because Microsoft abandoned Plays For Sure. Regardless, in this climate of consumer spending, Microsoft is probably better off cutting its losses on the Zune and shifting its focus to areas where it can have an impact - software and online services.

It reminds me a bit of what happened with Creative and its Zen player. No, Creative didn't abandon its line of music players. But it also recognized there was an opportunity to offer what it does best - high-quality sound systems - and tie into the iPod. Today, Creative still has music players in its lineup but it also has iPod speaker systems. Just this week at CES, Creative continued the "if you can't beat 'em, join 'em" push by introducing SoundBlaster for iTunes.

That's not to say that someone out there still can't unseat the mighty iPod. But it just might be Apple that does it first - by launching new variations of the iPod Touch instead of the iPod Nano. Remember: DRM on iTunes is soon to be a thing of the past; variable pricing is the future of iTunes; and downloadable apps are where the real growth is. It seems that Apple has a jump start here and others - RIM's Blackberry, Google's Android and now Palm's Pre - are right behind.

Has the track become too crowded for Microsoft to gain any ground in this race?

Topics: Mobility, Apple, Hardware, Microsoft

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24 comments
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  • Zune had nothing compelling.

    I was at WallyWorld, and while cheaper than any iStuff, it was still 30-40% more expensive than creative same size same screen players. The social has an incredibly bad implementation of a good concept. If, at launch, you could purchase over the web, instant sync to/from your computer over WiFi, it might have had a chance.

    Well that and MS really really really needs (in general) to fire every marketing company they currently use and hire a complete fresh new crop. Even knowing what a Zune was, and actively looking for the commercials, they really didn't make any sense.

    I do agree thought, I have a dedicated MP3 player, with incredible sound capabilities (Virtual3D being one of them, saved profiles of audio settings for headphone, car, speaker, etc) so my new Blackberry, while capable (and with MicroSD, pretty much unlimited capacity) as a music player, would be sufficient if I didn't have the dedicated player. In general, I can see the market slowly erode, however, there will, for the moderate term, still be a need/desire for standalone MP3 players.

    Simply put, I agree, Zune, iPods, other MP3 players (they really are commodity items now) are not where new revenue is at.

    TripleII
    TripleII-21189418044173169409978279405827
  • Zune Device....

    The Zune device should be dropped. the Zune Media player software should replace Windows Media Player and get integrated with MediaCenter. The Zune firmware should get baked into WinMo6.5 and 7.
    JoeMama_z
  • RE: The end of Zune? It's not just the music anymore

    Love my Zune, would by a Zune phone and I have yet to buy a cell phone. Did I say, "LOVE MY ZUNE"?

    Here's hoping it stays around as I don't like the Fem IPod... "Where's the BEEF?"
    hayesw@...
  • RE: The end of Zune? It's not just the music anymore

    Have any of you ever used a Zune? It is by far the best music player out there right now in my opinion. I use my Zune every day, all the time, in my car, at work, and at home.
    Yes the iPod is a good player, and the #1 seller out there right now, but i believe it is the hype of the company and the apple followers that make it much more then it really is.
    Try the Zune, give it a chance, you just might have a different opinion about it. Nice screen,Great sound, Games, videos, Podcasts, WIRELESS SYNC..... Don?t just believe what other people say about it. Most of them have never used the Zune to make an informed opinion.
    hiccius doccius
  • How many times have we been treated to stories

    of the demise of this, the demise of that, this is what it will be, that is what it will be, only to find it was not so?

    Let us take a wait and see approach to yet another rumor.
    GuidingLight
    • Read the article.

      Steve Ballmer himself, during his keynote address at CES, explicitly said that Microsoft is not going to pursue a Zune phone or future iterations of the Zune MP3 player. They're getting out of the game because they have no game.

      Microsoft apologists need to wake up and smell the coffee.

      In terms of software for smart phones, Microsoft and others are very much late to that game as well:

      Media Supplier of the Year: Apple App Store
      by Steve Smith, 12/18/08

      Apple App StoreGarden of EdenIt changed everything.

      In less than five months, the Apple App Store served more than 300 million downloads and broke all the existing rules for mobile media and ad delivery. The carrier's garden walls were clipped to the ground.In a relatively open marketplace, any iPhone or iPod Touch user can peruse a catalog of 10,000 programs and download them directly to a device. Media and even brands could name their own business model (free or fee) and run networked ads. No wonder everyone from CBS to AOL, Amazon to Sega rushed in with dazzling mobile programs. Suddenly, mobile gaming, geo-located services and even video looked appealing. Web radio provider Pandora, the most popular app of all, has registered more than 2 million users and delivers more than 1 million ads a day.

      At last, here is a mobile platform and a distribution model that lets brand marketers be of real use to consumers - and without the carrier roadblocks of the past decade. Audi, Warner Bros., Target and even Carling Beer were quick to market with a new breed of "branded apps" that entertained, promoted and stayed ever-present on home screens. The App Store's robust user-reviews give developers deep, immediate feedback and insight into how users engage mobile media. "From the first day the store opened, we have seen tremendous uptake of the Mobile News Network, and the ability to track user feedback has been vital to shaping future releases," says Jeffrey Litvack, global product director for Associated Press News.

      With staggering success comes the flattery of imitation, e.g. similar marketplaces for Google Android, BlackBerry, Nokia and Windows Mobile phones. By simplifying development, creating a frictionless distribution mechanism, and setting the model for brands to make money (or just new friends) in this more open garden of opportunity, Apple single-handedly rewired our thinking.

      http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=96843
      SkateNY
  • Music player market dying

    As noted in other places, the whole market for MP3 music players may be dying off.

    Apple I believe has anticipated this with the iTouch - it is evolving into less of a music player and more of a "personal entertainment" device. My nieces and nephews all want an iTouch, not for the music, but for games and other entertaiment features.

    Once again Apple has the lead, but here it's not insurmountable (yet.) If some company, be it Creative, MS, Sony, etc. puts out the willpower and effort to grab this emerging market, Apple can be overtaken. But not if the competition muddles around for another year or two.

    MS is in the best position to do so since they own so many pieces of the solution already (marketplaces, PCs, content, portable OS, API's, etc.) Sony would be my second choice.

    But they (MS) must overcome the main problems that have almost always made their consumer efforts fail. Those being

    1) internal bickering and competition, thwarting interoperability and
    2) excessive "platform" attitude towards consumer devices (building just a platform, and treating these as a platform, takes the end-user consumer experience out of MS' hands. Yet if it sucks, MS still gets the stigma.

    Consumer devices are not platforms! Their own Xbox proves it (it is reasonably successful.) People buy devices, then toss them out and buy new ones later!
    hickum
  • As always people who don't own one are the naysayers

    As usual the morons who don't actually own a Zune or have used a Zune for an extended period of time after owning and using an iPod and iTunes have no idea what they are talking about.

    I owned the previous three generations of iPods and spent hundreds every couple of months on iTunes and just before Christmas I bought a Zune 120Gb and a Zune Pass for $14.95 per month with unlimited music. I now have my Zune music library on three PC's and love the Wireless sync and built in radio and I also use it in the car. Zune software is so much better than iTunes.

    The key difference here is that now I have a choice with Zune Marketplace unlike iTunes and iPods. I can play my Zune music on any MP3 player - obviously except for an iPod. It would cost me more than $400 to now upgrade my iTunes library to the new DRM free iTunes plus which is ridiculous as I have already bought the music. However, Zune ripped in most of my iTunes library anyway.

    I have also heard on ZDNet that Windows Mobile will be extinct this year. I have also heard that Windows Server, Windows OS and many other Microsoft technologies were meant to be extinct by now and that Linux and Android will rule. And pigs might fly.
    Martin_Australia
  • the way l look it...

    After last time msft upgraded Zune. I know direction has changed. They didn't do much last time. Zune only have one problem, look thick. a cosmatic fix should be enough. make it thinner and look thinner. Is that hard? I don't think so.

    the fact is less and less people buying mp3 players. it is more of fashion than usefulness. people thought walk while listen is cool. soon they will realize it is stupid. it is like in the 70s, young people holding huge tape player walking around. that is stupid, it didn't last.
    jk_10
    • Now that DRM is going away

      No company is going to be able to maintain a "lock" on the end users hardware. MP3 hardware is cheap and soon you'll be able to upload your library onto any number of devices (how long before it's standard to have a flash card reader and MP3 decoder in all TV's). Now it (the MP3 player hardware) will be just a simple commodity where people shop for lowest price and needed features. What's going to matter the most? The price of music and the delivery/archiving software.
      oncall
  • RE: The end of Zune? It's not just the music anymore

    If any company really wants to compete with apple and the ipod, it really is simple. All you need to do is create a phone/gaming machine, with open software development. Much like the android platform. Think of a PSP with phone capabilities, and most importantly openness that thus far is only delivered by the android os.

    Specs that would guarantee success:

    Plays:
    Music: MP3, WMA, WMA Lossless, AAC, OGG
    Video: MP4, XVid, DivX, MKV

    Internet Access: wifi, wimax, 3G, GPS, and
    Intergrated Skype

    Hardware:
    - a swivelable camera lense, so it can double
    as a video cam, and take photos, AND take video
    (its rediculous that you have to unlock your
    iphone to do this)

    -Touch Screen
    -Slide out qwerty keyboard
    -sizeable harddrive at least 30gigs, but this
    would easily be scalable on different models.
    -Mouse trackball
    -removable flash card storage (which can easily
    be intergrated into music, and video players, as
    if it was on the harddrive)
    -wireless syncing
    -FM player
    -voice recorder
    -Video Out

    Gaming: Two analog joysticks, in addition to a crosspad. Shoulder buttons, in addition to the typical 4 button diamond.

    -Internet gaming support
    -If made by Sony or Microsoft, intergration into
    their gaming platforms

    Software:
    -Latest flash support out of the box. (VERY
    IMPORTANT)
    -Ability to put/devolope any software on there
    that you want... as long as it is compatiable of
    course, just no artificial restrictions.

    If a company put this out, they could easily set up a movie rental store, and even a game renting store. Or a unlimited gaming/movie rental store via subscription based ala netflix.

    It would also be easy to make a gaming model, and a non gaming model. Yes, a phone like this would be expensive, but so is a ipod touch, and all of the other neat gadgets out there. No, there probably wouldn't be a huge profit off of the gadget itself, but you could rake in a ton if you paired it with a subscription/rental store, with the ability to buy the content. But if you did want that to be successful, you would have to strip any DRM from content you buy. Also you couldn't pull any of that having to buy MS points BS.

    Unfortunately, these corporations think only from quarter to quarter, and not in the long term. From a quarter to quarter basis you probably wouldn't see a huge profit. But in the long haul, it would be a gold mine. The reason that no one has made an open gaming device, or multimedia device is the same reason that apple clung to their DRM on itunes with such clenched fists for so long. The want to guarantee that anything bought for the device is sold by them. And anything that is sold by them can only be used by their device. The reality is, if you make a compelling product, people will come to it on their own, it is stupid to handcuff your customers. Treat them right and you will be rewarded. I wish MS, and Sony felt confident enough in their products to allow competition on their own devices. If they allowed that, they would actually benefit themselves.
    LucidGoldfish
    • Hit or miss approach

      While your idea might succeed, there were great devices in the past that went nowhere. There were, for example, MP3 players years before iPod. Why did iPod become number 1? I believe it is because of Jeff Goldblum dancing on TV with iPod. Apple actually marketed their mp3 player to general audience on TV and iPod became synonymous with mp3 players.

      So advertising is very important, and Microsoft advertising sucks.

      Also if you notice that a lot of times Apple ads do not feature the actual products. And if there is a product in the add, you will not see a single technical spec associated with the product. At best, in the apple add you might see a demonstation of something that a product can do, but a lot of times it's just a beauty shot of a product.
      hamobu-22333136139518773481685514128812
      • Dream Device

        I do agree with you on a couple of points, namely that a good majority of MS advertising sucks (have to make an exception to the xbox... at least the 360 variants), and that apple, or more importantly Steve Jobs, knows how to sell a product, and is brilliant with advertising (product placement paired with "ultra cool" people illustrating the product placement being far more important than the ads themselves),but I do not believe that this is the major reason that the ipod became so successful, but it is a major reason for their continued success.

        The ipod's success was fueled, in my opinion, more by good timing and tight integration of software that can be closely compared to Microsoft's initial success with windows. MS became such a dominant force because of the ability to run it's software on a computer made by any company, or even a computer put together by an end user, plus it had a GUI. The computer industry was kinda a mess, with all of the different options at the time. Microsoft just took existing technologies, and put them together at the right time, along with IBM's big mistake of not owning the rights to the software themselves, and using out of house components. (although we all benefit from this mistake, and who's to say that the IBM computers would have become the dominant cornerstone for computing today if they didn't make this error.) Essentially, it can be summed up with right place, right time.

        There was quite a few MP3 players before the ipod. The initial ones, I have to say were of course doomed. They could only play a CD or two.... for most people what is the point. But even when players did come along that had a large enough storage to justify three to four hundred dollars, they were plagued with problems ranging from lack of ease of use, to easily breaking. At this point, apple solved this with the ipod's interface and its integration with the mac's OS, plus an online store to buy music. I believe that was 2001. This unto itself made a big splash, but it was tied to the mac, for the most part, which is what prevented it from becoming an instant mp3 king.

        In 2000 to 2001 hard drive space had finally dropped to a price point where it was reasonable to start ripping CD's to computers. And frankly before Napster's huge media impact, I don't think the majority of people ever even thought about putting music on their computers, let alone realizing they could. At this point a vast majority of people were still rolling with windows 98 and 8 to 20 gig drives. Although 2000 was a big year in computer sales, this dropped off alot with the fall of the economy in 2001. In 02 and 03 is when the majority of American households really had the ability to be putting their music collections onto their computers. With this ability, the market was finally ripe for MP3 players. Anything before that, really can only be viewed as products that came before their time. By this time itunes, and the ipod had been already fermenting in the Mac world, and already had rave reviews from PC pundits. The ipod had made a name for itself, with it's slick interface/intergration with the OS/and the itunes store. Then POW! 2003, itunes comes to the PC paired with, yes, a media blitz, as you point out, but it had already met critical aclaim under the OS9 and OSX, so much so, that some people were even using it with PC's. The rest of the MP3 players still could have taken the market, but none of them had a well devoloped music store, and streamlined software paired with it. Some did come with access to this store and that store, but it was clunky, and used different vendors for this and different vendors for that. The only, and I mean only exception to this was Sony, but they dropped the ball on that one. Their products wouldn't even play MP3's, no Sony thought, lets shackle the community with our own format, and that is all that you can use...plus they didn't make a universally recognized line, like the ipod. Not coincidentally 2003 was when the ipod truely took off, to sell in the millions. By 2004 the ipod began to dominate the MP3 market,yes, with its artful advertising, but it had already created this huge fan base of the tech savy, mac heads and the wealthier crowd with its product platform.

        So while I do agree that advertising did have a part to play in Apple's success, I think it had more to do with a decent, robust platform that no one else had, word of mouth, and frankly right place, right time....not advertising.

        I completely agree with you on Apple's ads being all about beauty, lack of specs... so on. Apple has made it's self into a Prada, Gucci... what have you, and well most of its products do have some wonderful things about it, I for one, do not want to be dominated by a corporation's control over me. An example of this is how long it has taken Apple to free it's itunes store of DRM. The only reason it has done this, is because it has been forced to, due to competition. I think it is absolutely ridiculous that someone has to pay again to strip music already bought of apple's implemented DRM. Apple, I am sure is cringing at the thought of freeing its music. Now you don't have to own an ipod to use itunes.

        I also agree that advertising is a must, with just about any product, I can't think of any device that has failed mainly due to lack of advertising. Sure, you could couple that with many devices that have failed, but for any device that has failed, it generally has to due with a variety of other reasons, not advertising alone. I still stick to what I said in the previous post, if Microsoft, Sony, Nintendo, Apple, Google, or anyone with enough capital backing made a product very similar to this, guarantee it would sell. And yes, of course you would need some advertising. But even with MS's terrible advertising, I am sure that it would still be a huge success.
        LucidGoldfish
        • I guess we can agree to disagree

          I remember back in 1998 and 1999 people who had gigs of MP3 files that they got from Napster, so digital music was well under way before iPod came to be. There were also mp3 players, including the players with hard drives in them. These could also double as external storage, something iPod could not do.

          I know that it is hard to believe, but advertising has a lot to do with market share. That is why apple spends so much money on advertising. Honda for example, was known as a number two Japanese car company in the US, while it was regarded as nothing more than a motorcycle company by the Japanese themselves. Also in Japan Macs have more than 50% market share while it is only 10% here in the USA. Same products are sold here and there, but the perceptions are markedly different.

          And when it comes to design and implementation, iTunes on windows is a slow unstable memory hog. Most other competitors from years back worked with Windows media player, which was a solid piece of software that came bundled with PCs.Therefore I do not think that iPods are more successful because they were better. I think that even though Apple was not the first in the market, it was first in the mind share due to heavy advertising. They reached people who were not into gadgets and did not know about existing alternatives.
          hamobu-22333136139518773481685514128812
  • Zune and X-box should go

    Microsoft should stop trying to out-apple apple and it should do what it does best, which is end-user software. The only reason why Apple is Apple is because it cannot be Microsoft. Apple is abysmal failure with software that is not tied in some way to Apple hardware. Apple can only achieve success by locking in hardware into software (and vice versa) and marketing the hell out of the whole thing to impressionable segment of the market.

    I think Microsoft should get out of consumer electronics all together. Better case can be made for web services, but even there I think Microsoft should exit. I doubt Microsoft makes money on search, hotmail, Msn network etc.

    Instead Microsoft needs to focus more on mobile and embedded market in addition to desktops and servers. Mobile phones is where the software market is growing.
    hamobu-22333136139518773481685514128812
    • Well

      Assuming that most of the goals of the Xbox are almost achieved, i wouldn't be surprised that it disapears after the Xbox 360 or get fused with somekind of PC.
      From what i have understood, the Xbox was not aimed at being an incredibly profitable product but a product aimed mainly at preventing Sony from ruling the living room with their playstation consoles.
      Bill gates had had a vision of the home PC future:
      The PC which would not stay what it was but would evolve into a multimedia server in the living room with all kind of clients devices.
      Howwever almost the same could come from the evolution of the playstation console. Thus Microsoft needed to prevent that at all costs hence the Xbox which has hurt the Playstation business in all possible ways.Moreover the Xbox has enabled to enhance in capabailities in entertainment and to develop solutions such as Xbox Live.
      Thus i would not be surprised that the Xbox merged in a form or another to with some PC and that Home desktop PC turn in some kind of powerful multimedia and gaming server with for client:
      Netbooks,netboxes,some evolution of Tablet PC,TV,smartphonesetc...
      I would not also not be surprised if Microsoft builds editions of the Windows PC OS for TV and for all possible forms of client.
      For the Zune, i don't clearly see the goals of Microsoft.
      It has perhaps been a very costly method to develop the Zune mobile and Zune PC software.
      It would however make some sense if all Windows mobile inherit Zune technology and if Zune PC software replace Windows Media Player.
      timiteh
      • I am not sure that this sort of strategic thinking ever pays dividends

        I am not sure that this sort of strategic thinking ever pays dividends.Big men dream of conquering my living room only to be tripped up by the smallest details in the market. Visions of Bill Gates and Steve Jobs always involve everyone using their products the way that these men envision it and paying for their services. People, on the other hand, have their own ideas of what they want to do and how their lives should be organized. In that respect, most successful products are either simple tools designed to do one thing well (like iPod) or extensible and adaptable to be used in ways beyond those originally imagined for that product.

        Take Microsoft office for example. I remember some years ago Microsoft touting web integration with Office. You could publish your office document on the web with a single click for everyone to see. Some marketing guru at Microsoft must have thought that everyone will start publishing their document massively and Microsoft office will usher in a new era of human collaboration and prosperity. I don't know anyone who actually does that. What keeps people locked into Microsoft Office, among other things, is Macros and VB scripts that people used to create functionality that was not there originally.

        As for Xbox undercutting Sony, Microsoft would have been better off partnering with Nitendo and investing in them to undercut sonny. Nitendo has experience in Marketing, manufacturing, distribution of consoles, etc. Instead Microsoft decided to create everything from scratch. Same with Zune.
        hamobu-22333136139518773481685514128812
  • The iPod is Number One for the Worst Reason

    iPod gained such staggering marketshare for one reason. You can say all you want about their devices' appeal or their brainwashing marketing, but it's their harassing business model that ensured people would return to the stores to buy their iCrap.

    Their iTunes DRM (which is going away and marks a dramatic departure from what's made them so successful) locked users in, and if iPod owners wanted to switch to other players, their libraries would be locked down or would have to be unDRM'd - a daunting task in and of itself.

    With Zune, while MS is trying its own strategy with the Zune Pass, simply could not compete with the strangle hold Apple had over its customers.

    If you have owned an iPod in the past, you were the one being owned... for sure
    dominiej@...
    • Another reason why iPod is number one

      The reason why iPod is number one is massive amounts of advertising. Apple has used advertising to make iPod synonymous with mp3 player. You can see iPod adds everywhere, and they never feature any technical specs, just some colors and people dancing. It has come to a point where in the minds of the consumer, iPod is the standard and everyone else is copying them.
      hamobu-22333136139518773481685514128812
    • Such a tired argument..............

      Psst: The average number of DRM songs on most users iPods are around 3%-4%. That's 22 out of 1000 songs that has DRM. Is it really much of a hassel burning the songs to CD/DVD which erases that DRM, and switching to another player? You surely can fit 22 songs on a CD/DVD, can't you? Takes maybe 10-15 minutes the most.........
      dave95.