ZDNet reader poll so far: Microsoft's Zune can't win

ZDNet reader poll so far: Microsoft's Zune can't win

Summary: If you've been following my series of posts on Microsoft's iPod-killer Zune and why fashion will be more important than technology to its success, then you may have seen the poll I ran last week (which is still open) where I asked who Microsoft should pick to be the equivalent of iPod's Bono. U2's Bono is probably cooler than cool and he transcends multiple generations of music lovers.


If you've been following my series of posts on Microsoft's iPod-killer Zune and why fashion will be more important than technology to its success, then you may have seen the poll I ran last week (which is still open) where I asked who Microsoft should pick to be the equivalent of iPod's Bono. U2's Bono is probably cooler than cool and he transcends multiple generations of music lovers. I'm not sure just how many other celebrities are in Bono's league. But I gave a list of some and asked ZDNet readers to vote. So far, the top answer by a longshot is that "Microsoft shouldn't waste its money. Zune can't win."  When I last checked, that answer accounted for 34 percent of 287 responses with Stephen Colbert trailing in a distant second place garnering 14 percent of the votes. Eleven percent of the responses think Microsoft can win on better technology, an answer I might agree with if Apple was somehow frozen in time, unable to respond to anything that bubbles up as being a technical requirement.  

Topic: Apple

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  • ZDNet readers said,,,,

    XP will never take the market...

    XBox didn't have a chance...

    No one will buy Vista...

    This is the year of the Linux desktop, (for 5 years)...

    David, I think you need to stop reading the MS bashers and thinking they have anything to do with the real world.
    • For a company which has no idea what style is...

      ... and think that craptacular bugs along with a malware-
      friendliness unknown to man before Microsoft stepped into the
      limelight is features people should actually pay for...... =P

      Microsoft is the very icon of mediocrity. Look at Zune! Who can
      honestly say it looks better? Has any likelihood greater than one
      in a million of success? Anyone brave enough to put a bet on its
      future success?

      Microsoft have no chance and will not ever have any chance
      when they can't take unfair advantage their desktop dominance.
      • XBox

        does not take advantage of their desktop dominance in any way (other than it does share some code, which saves some development costs but in no way gives them a market advantage). Yet XBox is doing extremely well for the relatively short time it's been out. So never say never.
        Michael Kelly
      • Buwahahahahaha, different day, same drivel.

        Tell me how the desktop Windows made XBox such a hit...
        • It didn't make the Xbox a hit

          Because, as we all know, the Xbox continues to lose money, every single quarter so far (other than the one when Halo 2 came out). Aren't products that are "hits" supposed to result in profits?
          tic swayback
          • Longtail

            You're thinking too short term as well as too narrow.

            First, for a product that only came out 5 years ago they are doing pretty well. The XBox waded into market in which they had zero experience and negative press. A game system? From Microsoft? Whose going to buy that? Now, in only their second generation they have a machine that gives the others a run for their money and have the best online playing network around. Granted we haven't seen what the PS3's online play is going to look like but most agree that Live is the XBox's strength. I'm going to even get bold and guess that starting with Q2 of 2007 they will have more black quarters than red.

            I say too narrow only because while they do lose money per unit sold they make money back on things like Live Points, any game that is published via Microsoft Studios, and peripheries such as controllers, memory units, etc. It's a classic sales strategy: sell the can opener at a loss and you hope to make your money back on cans.
          • You still can't call it a success

            I do understand the business model behind the Xbox, lose money on the Xbox itself (the handle) make money on the games (the razors). The problem is that no matter how popular, or how high quality the Xbox is, you can't declare it to be a success until it actually starts making money. MS' entertainment division loses money every single quarter, with one exception, the quarter when Halo II came out. So other than one brief glimpse of success, the Xbox has yet to achieve it.

            What's impressive, of course, is that only a company like Microsoft, with huge piles of money to burn, could withstand losses like this, year after year, in hopes of one day becoming profitable. It is certainly an enviable position to be in.

            Oh, and by the way, "the long tail" is generally used to describe the statistical distribution of a market--the long tail is the low frequency, low amplitude segment of the buyers--people who buy unpopular products, rather than in describing a product that takes a long time to be profitable. More info here:
            tic swayback
          • Define success

            All depends upon your definition of "success" and at what time you decide to apply that label. If a small business doesn't make profit in it's first day do you consider it to have failed? Given that it used to be that the average start-up didn't expect to be in the black for at least 2 or 3 years, and considering the console arena, I still have to say that the XBox has been a huge success.

            Agreed, the XBox has failed to financially hit black for more than one quarter. In that regard they haven't yet financially succeeded.

            In another aspect though they went from worse than a nobody in an unknown territory to one of the major players in just 5 short years, that would be considered a huge brand success.

            They can now parley their market success into a financial success. Now they finally have enough cachet to get developers and publishers developing for their platform that they never could have gotten before, hence driving more blade sales while at the same time making the razor blade handle more attractive, hence market success.

            Indirectly the XBox name and reputation has helped to make Microsoft more attractive again, hence driving stock prices. Last quarter they posted an 11% increase and named the XBox as being one of the major factors in driving that, making the XBox a stock success.

            Bringing this all back on topic the real points are:
            1. Microsoft has proven it can come from behind to gain both market and brand share. So while the Zune/iPod gulf seems huge so did the XBox/PS2 one.
            2. Microsoft has proven it has the financial stamina to make this work.
            3. Microsoft has shown it can tap into the younger market and make a product that surpasses it's "Microsoft" name.
            4. Microsoft understands there are secondary benefits in having something competing in the market even if it's not the market leader. XBox may not be the market leader in consoles *BUT* just by having it do well it has bolstered it's stock price and hence it's bottom line.

            P.S. Good catch on the long tail. I meant to say longhaul but "long tail" was on my mind since I was just catching up on his blog this morning (http://www.longtail.com/the_long_tail/)
          • Check the tense I used

            I think we're in general agreement. The Xbox shows signs of potential still--it could, at one point in the future, be a financial success. But so far, one can't call it that. I certainly wouldn't call it an outright failure, but until it actually does what it was supposed to do (make money consistently), you can't laud it as a smashing success as some of the posters higher in this thread have done.
            tic swayback
      • ...they will probably do very well.

        I'll bite...

        First, like others have mentioned, the XBox is a great example of something that they have done right. It started from less than zero, with a negative reputation because of it's Microsoft name, and now it's one of the big three consoles. Financials aside that is pretty amazing.

        Second, design is personal. Some people love how the iPod looks, others hate it while a huge group doesn't really care. One thing the press *does* agree on for the most part is that the Zune is a good looking unit, and this is just 1st Gen.

        Style is also something that changes and it tends to driven by people's needs to be unique. The iPod is starting to be the same thing as a mini-van, soon everyone will have one and the indie crowd, which usually kicks off the next wave of commercial style, will look elsewhere for their DAP, and there is a very good chance the Zune will be their new baby.

        I'll gladly take a bet on it's future path:

        - Initial release will gain a small but vocal group, probably less than a percent market share.

        - After it's first (maybe second) firmware update and with more time on the market it will gain more success as its name is put out there, plus there will probably be a huge ad campaign at that point. Market share will jump, I'm guessing 2% to 4%.

        - Second gen units will launch, Zune will integrate nicely with the 360, more people will know the name and it'll break the double-digit market share mark and it's profits will go into the black.

        After that it'll be a features/marketing/services war between Apple and Microsoft but have no doubt, it will be a war. Just the fact that Jobs has mentioned it at all during interviews means he knows there could be something to the Zune.
        • Design response

          ---One thing the press *does* agree on for the most part is that the Zune is a good looking unit, and this is just 1st Gen. ---

          Not sure what you've been reading, but I've seen it referred to as the "iTurd" given the brown color, and the reviews haven't been all that great:
          Motley Fool
          I think this thing is just plain ugly, folks. That tiny little wheel coming off the large screen: It looks unbalanced. And the finish, at least in the large images available for download from Microsoft, looks decidedly low-rent. And look at those colors. There are only three, and none of them is really a color. Black and white ... bland, but OK.

          But brown? Brown? Insert your own scatologically-themed "truth in advertising" joke here. My Macophile colleagues have already begun. Coming mere hours after Apple (Nasdaq: AAPL) spiced up its entire iPod line, the Zune looks as appealing as day-old dog chow, or Windows 95.

          Zune is ugly. Not just unattractive, but Rodney Dangerfield UGLY. Its various elements don't integrate well. It's as if the screen, the big center button, and the little side buttons were chosen from a grab bag of leftover parts by a blindfolded monkey. The grey strip that wraps around the screen and the large button appears to be the stylistic equivalent of duct tape: a brute force attempt to stick together things that otherwise don't belong together.

          Zune is ugly. Judging by the photos at Microsoft's virtual press center, the Zune is made of cardboard or perhaps the underside of laminate flooring scraps. Its finish appears flat and dull. A gadget that would compete with iPod should scream "Take me in your hands! Manipulate me! Play with me!" Look at Apple's promotional photos of the iPod, and words come to mind like shiny, sleek, and sexy. Look at Microsoft's photos of Zune, and words come to mind like yuck and . . . YUCK. What Zune says to me is "You wouldn't want to pick me up because you don't know where I've been."

          Did I mention Zune is ugly?

          So no, there hasn't been a huge love for its design in the press.

          The other thing to think about with Zune is that its success depends upon building a user community. The thing that sets it apart is sharing crippled songs. With no other users, you can't share. So there needs to be a critical mass of users for it to become a useful product.
          tic swayback
        • Its features will initially be useless...

          ... because so few are using it and it will have lots of bugs which
          will make users scream and complain at forums.

          Microsoft will be its usual persistent self and finally get it in a
          reasonably well functioning state but users will get tired of it
          when they realize they've been screwed again.

          The wireless feature is useless because Zune?s Big Innovation is,
          prepare yourselves, Viral DRM!

  • It's dead in the water

    The initially enthusiastic press seems to have already turned on the Zune, before it's even been released. Rumor also has it that Apple will be making a new iPod announcement at some time around the holidays, which should put the final nail in the Zune's coffin.

    Probably a good thing for MS anyway, as they were unable to match Apple's price point without accepting a $50 loss on every Zune sold. Given how difficult it would be for them to build their song sale business up to a point where it could cover this loss, perhaps it's better just to skip the product altogether.
    tic swayback
    • More like a submarine

      I can see where you are coming from but I have to disagree on a few points. Instead of dead in the water I see it more as a submarine, more than ready to emerge from the bottom and take at least a small chunk of Apple's monopoly.

      1. As entertaining as "the press" is they are far from a good source on how well a product will do. There are a huge number of products in every sector that were given horrible pre-launch reviews and yet went on to succed.

      2. A lot of people will checkout the Zune simply because it's *not* an iPod so no announcement from Apple will change their minds.

      3. Microsoft is thinking of the long term, losing $50 per unit in the short-term is nothing. They'll get some early adopters, they'll get a ton of feedback, they'll have put "Zune" out there while giving themselves time to bring design in-house. Basically they'll do what they did with the XBox. They'll lose money in the first and probably second gen while they see how the market reacts.

      I'm guessing they've given themselves a 5 year window in which to become profitable, meaning they are probably willing to continue to lose at least $50, if not more, per unit.
      • Is 5 years enough time?

        ---A lot of people will checkout the Zune simply because it's *not* an iPod so no announcement from Apple will change their minds.---

        I would suggest that more people will do the opposite, not bother with checking out the Zune because it's *not* an iPod, and they want what everybody else has. I don't think there's much of an iPod backlash out there, given their continuously rising sales. Sure, among the geeks who post on tech sites, to be sure, but if they represented reality, we'd all be using Linux.

        ---I'm guessing they've given themselves a 5 year window in which to become profitable, meaning they are probably willing to continue to lose at least $50, if not more, per unit.---

        Here's the issue though--the Xbox isn't supposed to be profitable for at least 7 years after launch. And Xbox games sell for a lot more money than a song does, and a lot more of the profit from a game sale goes to MS than from a song sale (the RIAA eats up nearly all of the 99 cents). Sure, if the product catches on, you'll sell more songs than you do video games, but are the few pennies you make per song enough to overcome that $50 you lost on selling the player? Say you make 5 cents per song (probably an overestimate while they're still paying off store building infrastructure costs). You have to sell each purchaser 1,000 songs just to break even. That's a hell of a lot of songs per user.
        tic swayback
  • Skewed Poll

    A few things that skew this this poll to the point of worthless:

    1. The average consumer that Microsoft is really competing for isn't the type to read a ZDNet blog. It's hard for us geeks to understand but 90% of the iPod-base doesn't read blogs.

    2. Your average reader probably has an iPod and they're really not going to want to say some other product is going to beat their's.

    3. Most people didn't think the iPod itself was going to be as big as it is before it came out.

    Maybe the Zune will work, maybe it won't, but a sampling as small and focused as a ZDNet reader probably isn't a good indication of anything.

    Personally I think it will shake up the DAP space and I hope it takes some of the wind out of Apple's sales, because the consumer always wins when companies are hungry. Plus, no one should underestimated Microsoft, I thought the XBox was probably going to failed fad and look where it is now.