The pundits spoke (and wrote some of the most awful, naive nonsense that I've ever read). They said that Microsoft's Zune PMP would fail. So how do they now account for it capturing 9% of the market share in the first week?
The NPD Group, which tracks the sales of many of the top retailers (although it is important to add that it doesn't report on sales made by Wal-Mart, Amazon.com or Apple Stores) says the Zune digital music device had a 9% market share in its first sales days Nov. 14-18, compared with 63% for Apple.
Ross Rubin, an NPD analyst, said "for a new brand that received limited to mixed reviews, and which is incompatible with the leading music store (Apple's iTunes,) as well as other music stores, it was a good launch."[poll id=45]
Think about it. Microsoft threw one new PMP into a market dominated by Apple, got slammed in pretty much every review out there and still managed to hit the #2 spot in 4 days. That's not bad going.
But Microsoft will have to work hard to keep this momentum going to keep up the pressure.
What I believe Microsoft needs to do next is to release a competitor for the Nano and Shuffle (maybe one player, maybe two) and start introducing a range of players with different capacities. The PMP market isn't a "one price fits all" market and high volumes could be at the lower cost end of the spectrum. Ideally Microsoft needs these Nano and Shuffle competitors out of the door by next summer. Next, it needs to revise the current model and expand the existing Zune for December 2007. More colors, a range of capacities, a range of prices.
Will this guarantee Zune's success? I don't know. Apple is a formidable opponent. But does the Zune really need to become the #1 PMP anyway? Isn't offering Apple some competition and offering the consumer a choice enough?