Why Microsoft's Zune can't dent Apple's iPod

Why Microsoft's Zune can't dent Apple's iPod

Summary: Microsoft's Zune music player has little or no chance of denting Apple's iPod juggernaut and contrary to all the digital ink spilled on product comparisons and reviews most of the reasons are strategic. Apple has built up quite a moat around its iPod business.

SHARE:
TOPICS: Apple
53

Microsoft's Zune music player has little or no chance of denting Apple's iPod juggernaut and contrary to all the digital ink spilled on product comparisons and reviews most of the reasons are strategic. Apple has built up quite a moat around its iPod business.

Bottom line: Even if Microsoft's Zune is just a first volley it has a tough road ahead. 

Exhibit A: Apple has managed to integrate the iPod into daily life. Today Apple announced it is partnering with Air France, Continental, Delta, Emirates, KLM and United integrate the iPod with in-flight entertainment systems. This development builds on an August integration deal with Ford, General Motors and Mazda and a January partnership with Chrysler. Overall, Apple has wormed the iPod into 70 percent of 2007-model automobiles.

Exhibit B: Apple has critical mass to thwart new features on the Zune. The most interesting feature of the Zune is the ability to wirelessly share and download music. The issue: There won't be enough Zune users to make this feature really sing. Apple has sold more than 70 million iPods. It could copy Zune's wireless feature and make a huge impact instantly. "The Zune's most talked about differentiator, wireless sharing with other Zunes, will not turn out to be a significant selling point. If, at some point, there are millions of Zunes in the market, the wireless sharing capability may prove to be a more compelling feature," says Piper Jaffray analyst Gene Munster in a research note. Of course, sharing restrictions may also render the Zune's wireless capabilities moot.

Exhibit C: Content partnerships. Speaking of critical mass, Apple has lined up more video and music deals with iTunes relative to Zune's market place. While this moat is formidable it may be the easiest to overcome. Why? The entertainment industry is wary of Apple's clout and it can't hurt to have another big player like Microsoft as a counterbalance. The customer experience may be a little harder for Zune to conquer.

Exhibit D: The grandmother effect. Ask your grandmom about the iPod and you'll get a response. That state of affairs has taken years of marketing to cultivate. The Zune? Still confined to geekdom and one swell launch party isn't going to close the gap soon.

Exhibit E: The halo effect (or lack of it). If you believe in Apple's so-called halo effect, which dictates that iPod sales lead to Mac sales the reverse could be true with Microsoft. It's the holiday season and Vista's delay is likely to hamper PC sales. Will that impact Zune sales?

Topic: Apple

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

53 comments
Log in or register to join the discussion
  • all valid reasons

    But you left out the biggest reason:

    Turd brown.
    Monkeypox
    • The "Brown Turd" is good.

      The "Brown Turd" is a good idea. Nobody will want to steal it! LOL! Actually I didn't like the idea myself, until I saw one. It's really kinda cute. The casing has a translucent shell that casts a green tint to the edges making the brown player look very unique. I still went with the black one though...
      Narg
  • I agree

    The funny thing is that even if Zune did happen to be better than iPod (which it isn't), it wouldn't make one lick of difference. Apple has effectively raised barriers to entry as you have pointed out:
    [i]Apple has managed to integrate the iPod into daily life.

    Apple has critical mass to thwart new features on the Zune.

    Ask your grandmom about the iPod and you'll get a response.[/i]

    Note that not a single one of those statements actually has anything to do with how much better the iPod itself is when compared to the Zune. It is why I kind of laugh at the "Zune won't succeed because it is big and bulky, has poor resolution, wireless is crippled, etc.". While many of these claims are true, it actually has nothing to do with why Zune will fail. Zune will fail because Apple has created barriers to entry (like refusing to license FairPlay) and, as such, has a monopoly.

    [i]Apple has sold more than 70 million iPods. It could copy Zune's wireless feature and make a huge impact instantly.[/i]

    Yup, so why bother innovating if Apple will just copy it and, through its monopoly, have instant success? So, while having a monopoly itself isn't illegal, harming consumers with that monopoly is. Consumers are harmed because MS wasn't allowed to innovate freely for fear that Apple would, as always, simply copy the feature.

    So, anyone want to join me in a class action lawsuit? ;)
    NonZealot
    • Yeah let's sue Microsoft and Apple...

      They both hinder your ability to innovate. What you innovate software wise.. Microsoft will recreate and put into the O/S. Microsoft will laugh silly.

      What you create MP3 wise, Apple will just laugh silly.
      ju1ce
    • You really should...

      Change you name on here. You are constantly defending
      Microsoft's every move.

      [i]Yup, so why bother innovating if Apple will just copy it and,
      through its monopoly, have instant success? So, while having a
      monopoly itself isn't illegal, harming consumers with that
      monopoly is. Consumers are harmed because MS wasn't allowed
      to innovate freely for fear that Apple would, as always, simply
      copy the feature.[/i]

      That's a Microsoft tactic, they don't ever innovate Microsoft is
      the original IP thief and always will be. From their first GUI to all
      the other "features" they've copied from Apple Computer and
      others.
      Rick_K
      • Quick question Rick

        How does your cheek feel? Hope the hook didn't hurt too much. :)
        NonZealot
    • Almost a really good pont. Nice effort.

      ---While many of these claims are true, it actually has nothing to do with why Zune will fail. Zune will fail because Apple has created barriers to entry.---

      Excellent point. One obvious question to think about is how Apple managed to raise those barriers. Some was through savvy marketing, but a great deal of the difficulty Zune faces comes from customer satisfaction. For me, the iPod has changed the way I listen to music, and I'm very happy with it. Clearly, I'm not alone, and that (along with some snappy ads), is why the iPod is integrated with daily life, why it has critical mass, and why even grandmothers have heard of it.

      ---as such, has a monopoly---

      Ah, but one must always remember that having a monopoly is perfectly legal, as long as one does not violate the law to achieve or perpetuate it. Since Apple has done neither, the resultant monopoly is a sign of their overwhelming success.

      ---Yup, so why bother innovating if Apple will just copy it and, through its monopoly, have instant success? So, while having a monopoly itself isn't illegal, harming consumers with that monopoly is.---

      If someone innovates, and Apple copies it, and then everyone gets to use it, how are consumers harmed?

      ---Consumers are harmed because MS wasn't allowed to innovate freely for fear that Apple would, as always, simply copy the feature---

      Now you're just being silly. How is MS prevented from innovating? Was MS prevented from adding features to the Xbox because maybe Sony might add them to their new device?
      tic swayback
      • Thanks tic!!

        [i]a great deal of the difficulty Zune faces comes from customer satisfaction[/i]

        Likewise, most people who buy a Windows computer must have some level of customer satisfaction. After all, Apple has [b]always[/b] been an option and yet only 4% of people ever thought "I'm not satisfied with Windows, I'm going to get a Mac". Wow, I'm surprised you would admit that OSX will fail to capture marketshare because Windows has such great customer satisfaction!

        [i]Ah, but one must always remember that having a monopoly is perfectly legal, as long as one does not violate the law to achieve or perpetuate it. Since Apple has done neither, the resultant monopoly is a sign of their overwhelming success.[/i]

        Actually, if a monopoly is harming consumers then yes, it is illegal. Since the only reason Zune sucks so much is that Apple prevented it from being innovative, we are stuck as consumers with innovation at Apple's typically sloth-like pace.

        [i]If someone innovates, and Apple copies it, and then everyone gets to use it, how are consumers harmed?[/i]

        Because no one will innovate if they know Apple will copy it. Apple has proven time and time again that it will copy everything it can (GUI, BSD, MP3 player, Safari, etc.) so competitors have every reason not to even try. I think this is why Apple didn't innovate while MS was gaining its 96% marketshare.

        [i]Was MS prevented from adding features to the Xbox because maybe Sony might add them to their new device?[/i]

        Yes. The XBox was going to be even better than it currently is but you nailed the exact reason why it isn't.

        [i]Now you're just being silly.[/i]

        Hmm, you would know. ;)
        NonZealot
        • Microsoft: the victim

          "Since the only reason Zune sucks so much is that Apple prevented it from being innovative"

          Oh I think Microsoft had a lot to do with why Zune sucks so much. How has Apple prevented MS from being innovative? How can anybody prevent innovation? Innovation and good design is the only way to overcome copy cat companies.

          You can't blame Apple because the Zune is so ugly.
          Or because it's so bulky, or because of it's lame pricing scheme. Or because of it's crippled Wifi functionality, or because despite of it's large color screen, you can buy any Movies or TV shows for it at the Zune store. That's all Microsoft innovation.
          Tigertank
        • I can't get no....no no no!

          ---Likewise, most people who buy a Windows computer must have some level of customer satisfaction---

          Uh, duh. Sorry if I didn't spell out the obvious for you. People use Windows machines and get their work done. They often replace them with new ones. Obviously there's some level of customer satisfaction there.

          ---Wow, I'm surprised you would admit that OSX will fail to capture marketshare because Windows has such great customer satisfaction!---

          Geez, there you go again. You had a nice statement, but you had to add something crazy at the end. Go back and read my post. I attributed some of the iPod's dominance to customer satisfaction. I also mentioned marketing as another factor. I'd also throw in the iTunes store lock-in, just to be fair. So let's compare with your statement attributing 100% of MS' marketshare to customer satisfaction. Hmm, has MS ever done anything else to gain marketshare? Anything like marketing, or maybe lock-in. Or God forbid, illegal actions that would bring the Justice Department down on them?

          ---Actually, if a monopoly is harming consumers then yes, it is illegal.---

          Having to pay for a product harms me because it's money I could instead spend on food. Thus, any company that charges me for their product is breaking the law according to your statement. Antitrust law is a lot more complicated and subtle than silly statements like the above.

          ---Since the only reason Zune sucks so much is that Apple prevented it from being innovative, we are stuck as consumers with innovation at Apple's typically sloth-like pace.---

          That's going to be a fun one to prove in court. First, MS has to prove that their own product sucks and that despite their public statements, they do not innovate.

          ---Because no one will innovate if they know Apple will copy it.---

          Given the number of mp3 players out there with new features, again, this is gonna be tough to prove in court. Funny how only MS seems to have problems innovating in this market. Poor babies.

          ---The XBox was going to be even better than it currently is but you nailed the exact reason why it isn't---

          Thanks, I was wondering why it sucked so hard.
          tic swayback
        • please tell me this post is a joke <nt>

          ...
          doctorSpoc
      • I must agree . . .

        It's nice for once that the 'monopoly' is NOT some piece of garbage,
        as was the case of Beta vs. VHS. Regardless, iPods have also
        changed the way we listen to music as well and nobody is bitching
        around here about it.
        999ad@...
    • Who cares?

      Finally for everybody sick of iPod this, iPod that. For everyone who doesn't want to be any part of iLife. For people who just want to be different, there is now a viable alternative to the iPod. With integration with the Xbox 360, Media Center, Live Anywhere, and future phone implementation, a bevy of accessories shipping with it and being developed how can the Zune not succeed? I think a lot of iPod fanboys are looking at this device and are not even giving it a chance. What the iPod needs is some serious competition. Hate to break it to you but there are people who simply won't buy into the Apple BS. There are obviously better devices with superior audio quality, features, and capabilities but what has happened is that not only has Apple made a hugely marketable device they have created a culture. Zune will change this. One day at a time. And finally and hopefully Apple will have a true challenger. Only then will see true updates to the iPod.
      infenit101
      • re: Who cares?

        Microsoft's customers should care! What about all the songs purchased through the MSN music service which cannot be loaded onto the Zune. Or how about Napster, Yahoo, .....those songs cannot be loaded onto the Zune. Why can't the Zune's software be loaded onto a pc running Vista?
        Face it - microsoft has a very, very large hill to overcome. They cannot even get there products to work together!!!
        shidokan@...
    • But wait ...

      ... you said ...

      "Zune will fail because Apple has created barriers to entry (like refusing to license FairPlay) and, as such, has a monopoly."

      But MS claims that Zune will play Apple's AAC file formats -- to the point of suggesting that even Apple Protected AAC files will play on Zune.

      How is that possible if Apple didn't license FairPlay to Microsoft?

      DRM is BAD but I would rather be locked into Apple's FairPlay DRM than Microsoft's "PlaysForSure" and now find myself having to switch over to Zune's DRM (which Microsoft hadn't licensed to anyone else either!)

      Trusting any vendor is risky but trusting Microsoft over Apple is just NUTS!
      M Wagner
      • ACC is not an "Apple" format it's part of the MPEG spec <nt>

        ...
        doctorSpoc
    • MS not being able to innovating freely?

      And Apple copying MS? History shows it's been the other way around. And MS was harmed for their illigal tactics, which help them in their monapoly quest. As a result of the pressure put on MS, competition is bearing. (example, FireFox)
      dave95.
  • My first "real" apple experience

    My University had Apple labs, and they didn't work all too well (I blamed the school, and it was partially at fault [limiting memory, etc]). A few years later, I wanted to not have to lug around CDs all the time (even if they just sat in my car), and I didn't like switching them while driving. The iPod was the most advanced mp3 (and AAC) player out there. I bought the 20 GB model. Soon after, I didn't even want to buy CDs, which led to my first iTunes purchase. Soon after that, I converted all my songs to AAC from MP3. Next step, I bought a Mac Mini. Now, I have a mac book pro. And it is a fine, fine machine. Definitely some sort of evidence to back up your claim that iPod sales lead to Apple computer sales.
    Voodoo187
  • Exhibit A

    Exhibit A sounds nice indeed, but apparently KLM according to Dutch newspapers KLM has no knowledge of this deal..

    One additional missing feature is the ability to dock it as a harddrive....
    tombalablomba
  • Features

    It appears that the ZUNE will not sync up contacts, calendar info, and doesn't have a basic clock feature. I have a 30GB IPOD, and I use these features (sure would be nice to be able to add or delete calendar or contacts). Why can't MS use the Windows Mobile (CE) as the OS in the ZUNE to provide some functionality that the IPOD doesn't have?

    I am not a Microsoft basher and if it weren't for Microsoft many of us wouldn't have (good paying)jobs, but it seems that their marketing people have really blew another opportunity to put out a good product with more features than their competitor. I was seriously considering buying a Zune and ditching my IPOD, but the more I find out about the Zune the less I am inclinde to buy one. Maybe this is why the zune.net website is so lacking with information.

    What the I-POD, Zune or whatever else comes out needs is more functionality!
    BroMan