“Microsoft said Friday it plans to release a new music and entertainment player and accompanying software under the ‘Zune’ brand this year, in a belated attempt to challenge the dominance of Apple’s iPod player,” Reuters reports.
“The world’s largest software maker faces an uphill climb in closing the gap on Apple’s iPod media player and iTunes Music Store, the runaway leaders in their respective areas,” Reuters reports. “The iPod holds more than half of the digital media player market, according to research company NPD, while iTunes accounts for better than 70 percent of U.S. digital music sales. ‘Creating a lifestyle device, Microsoft is clearly going to face a battle here,’ said Michael Gartenberg, research director at JupiterResearch. ‘It’s going to be hard for them to create the same level of cachet that Apple has with the iPod.'”
Full article here.
[Thanks to MacDailyNews Reader “Lurker_PC” for the heads up.]
“Billboard Magazine broke the news in its July 29 edition in a exclusive interview with Chris Stephenson, the company’s new general manager of marketing for MSN Entertainment Business,” The Wall Street Journal reports.
“The new product is the company’s strongest effort yet to rein in Apple Computer’s iTunes/iPod juggernaut, currently responsible for about 70% of the digital music market and 75% of the portable digital music player market, Mr. Stephenson told Billboard,” WSJ reports.
Full article (subscription required) here.
Antony Bruno reports for Billboard:
• Microsoft officials for the first time have confirmed that the Redmond, Wash.-based company is readying a portable music player and integrated service, shedding new light on a topic that has fueled rampant speculation in news reports and blog postings for weeks.
• In an exclusive first interview with Billboard, Chris Stephenson, Microsoft’s new GM of marketing for MSN Entertainment Business, says the company will later this year launch Zune, an umbrella brand for what he says is “a family of hardware and software products” targeting various digital entertainment services.
• The first implementation of this will be the portable music player and digital music service, in what is the company’s strongest effort yet to rein in Apple Computer’s iTunes/iPod juggernaut, currently responsible for about 70% of the digital music market and 75% of the portable digital music player market.
Full article (subscription required) here.
“Gartenberg said, in creating its own products Microsoft also risks alienating partners such as Creative Labs Inc. and Samsung Inc. Those companies are already using Microsoft’s software for their own portable entertainment players, although they’ve had little success against Apple’s juggernaut,” Allison Linn reports for The Associated Press.
“‘This is a very tough message,’ Gartenberg said. ‘If you’re the head of Creative, as of this afternoon you’re not just facing Apple, which was bad enough, you’re now facing you’re partner.’ He said it could have even deeper repercussions if people in other industries grow wary of partnering with Microsoft for fear the company will decide to launch its own, competing product. Microsoft’s success has been built on working with hardware manufacturers to make products running its software. ‘It’s certainy going to cause a lot of fear and uncertainty and doubt in the ecosystem,’ Gartenberg said,” Linn reports.
Linn reports, “Gartenberg said Microsoft confirmed to him that it would release a wireless device that would play both music and video this year. The device will have an accompanying content service, Gartenberg said.”
Full article here.
Michael Gartenberg blogs for JupiterResearch, “This is an acknowledgement that Microsoft is clearly not happy with Apple’s dominance in digital music. I don’t think it is concern about new growth scenarios. It’s more a concern that Apple controls a key endpoint in the digital home and that Apple bits flow only to other Apple controlled bits or devices. That scenario doesn’t bode well for Microsoft’s larger ambitions Second, even though Microsoft still talks about the diversity of the Windows platform asan overall advantage, let’s face it, the platform argument is dead and licensees will have to deal with it. On one hand, no one has ever successful created a business where you license technology to licensees and simultaneously compete with them on the device side. On the other hand, it’s not like there’s a lot of other places for licensees to go to get technology.”
“Bottom line, when Microsoft decides to enter a market, you can’t ignore the impact they will make. It’s likely that by force of will and spending lots of money on marketing with a high cost of acquisition on new users, they will can capture some market share,” Gartenberg writes. “Early market share, however, isn’t likely to come from disgruntled iPod users looking to switch. The real losers in the short term are likely to be the likes of Creative, iRiver and other former partners that have failed to deliver to market share from Apple and will now find themselves not only competing with Apple but with their former partners from Redmond.”
Full blog posting here.
So, it’s confirmed. We suspect that Microsoft is really shooting for Apple’s iPod+iTunes market leftovers, not the iPod+iTunes market itself. Regardless, we hope Microsoft spends a lot of money on “Zune,” even if they are way too late (as has been the case for quite some time — as there are way too many iPods out there and iPod+iTunes is simply too good). While we don’t see Microsoft’s efforts as much of a threat to iPod+iTunes, we also hope it pushes Apple by providing some measure of real competition that will drive innovation even faster.
As we’ve written before in response to the “Zune” rumors, it remains to be seen how their so-called “partners” like Creative, SanDisk, Toshiba, Sony, MTV, Napster, etc. will react to this betrayal by Microshaft. There still is, after all, a nice minority share of the market that iPod+iTunes doesn’t own. It looks like Microsoft wants it all for themselves as usual.
Of course, if Microsoft starts to show any momentum, Steve Jobs could just call up the also-ran device makers and music services and license FairPlay to them. Then everyone except Microsoft would be iTunes and iPod compatible. Whoops! All Zune-related development, marketing, manufacturing, and other costs = total write-off. Game, Set, Match.
That’s one way to go. Another is to just stay the course, which would be even easier to do if Mac growth were to continue to ramp up at the same time. And, if just some of what’s rumored for next-gen iPods comes true, then Microsoft and the rest of the roadkill are in for the usual world of hurt. Even if Microsoft could somehow manage it, it’d take quite some time for them to significantly impact Apple’s iPod+iTunes juggernaut.
Related articles:
Microsoft’s rumored ‘iPod killer’ poses little threat to Apple’s domination – July 18, 2006
Microsoft plans Super Bowl ad for ‘iPod killer’ – July 17, 2006
Sounds serious: Microsoft approaches iPod accessory makers for Zune would-be ‘iPod killer’ – July 12, 2006
Microsoft preps complete line of Xbox-branded digital-media products – July 11, 2006
Photo of Microsoft’s ‘iPod killer?’ – July 11, 2006
10 reasons why Microsoft’s ‘iPod killer’ will fail – July 11, 2006
Enderle on what it would take for Microsoft to kill Apple’s iPod – July 10, 2006
Microsoft: ‘iPod killer’ reports based on ‘speculation and rumors’ – July 07, 2006
Can Microsoft hit a fast moving target? Apple likely to debut wireless iPod this year – July 07, 2006
Analysts: Microsoft faces uphill fight to supplant Apple’s iPod+iTunes market dominance – July 07, 2006
Microsoft plans to convert iPod users by replacing iTMS songs with free WMA format songs – July 06, 2006
Microsoft to release wireless ‘iPod killer’ by Christmas to challenge Apple – July 05, 2006
Analyst Wu: Microsoft unlikely to dethrone Apple iPod+iTunes – June 21, 2006
Microsoft preps iPod+iTunes killer – June 19, 2006
Report: Microsoft readying Apple iPod+iTunes rival – June 16, 2006
Microsoft: No iPod killer planned – June 05, 2006
Microsoft, Toshiba, DoCoMo, Victor to develop Japan iPod+iTunes killer – June 02, 2006
Patent application shows iPod capable of live wireless video conferencing – June 13, 2006
Apple patent application filed for wireless iPod+iTunes distribution – May 04, 2006
Generator Research: Apple to Ship $4.2bn in Wireless iPods (WiPods) by 2010 – March 14, 2006
Ready for your wireless Apple iPod? – February 09, 2006
Wireless iPod? CSR and PortalPlayer to bring wireless connectivity to personal media players – February 08, 2006
Wireless Apple iPods coming in 2006? – December 09, 2005
More blood on Apple iTunes Music Store’s play button: MyCokeMusic is dead – June 20, 2006
More blood on Apple iPod’s Click Wheel: iRiver gives up on digital media player market – May 23, 2006
More blood on Apple iPod’s Click Wheel: Sony’s Walkman Bean is cooked – February 13, 2006
More blood on Apple iPod’s Click Wheel: Dell dumps ‘DJ’ hard-drive MP3 player line – February 04, 2006
More blood on Apple iPod’s Click Wheel: iRiver pulling out of Europe? – February 01, 2006
More blood on Apple iPod’s Click Wheel: Thomson gives up on MP3 player, CE markets – December 12, 2005
More blood on Apple iPod’s Click Wheel: BenQ withdraws from MP3 player markets – November 28, 2005
More blood on Apple iPod’s Click Wheel: Olympus halts production of portable digital music players – November 09, 2005
More blood on Apple iPod’s Click Wheel: Rio is dead – August 26, 2005
Apple’s iPod has blood on its Click Wheel: Virgin Electronics is dead – March 08, 2005
Apple’s iTunes Music Store has blood on its play button: BuyMusic.com is dead – March 28, 2004
at least now, when they try to sell this in France, they’ll have to make a mac compatible version
July 29th interview? Seeing into the future are they?
Even when you spell “shit” with a Z, it still smells the same.
another one.
how many more can they release?
There are PLENTY of people I know who would buy anything just because it has the MS name. Just like some people are for Apple. But some people HATE Apple and would never even TRY anything that says Apple. They wouldn’t even give it a thought. So MS can easily sell to those people. And they don’t have to compete with any one part of Apple’s stuff. They people they will sell to don’t even know about Apple’s stuff anyway, they just know it’s Apple and so they hate it.
That’s right Apple has NEGATIVE cachet too. That leaves the door open for MS.
<sarcasm>Apple is DOOOOOOMED!
We all know that Apple doesn’t sell any computers anymore,
and those computers that they do sell are nothing but pricey toys
for which no software is written
and what software is written for Apple is all stupid anyway
because it doesn’t work on Windows
And Apple computers aren’t safe on the internet
and need security to protect them
and the only reason Macs are not being attacked is because nobody uses Macs and nobody wants to write viruses for it.
Blah blah blah blah blah blah
</sarcasm>
is it just me or does Zune sound like a bunch of unhip, desperate, has-beens trying to create what they think young people will think is a cool name?
I will crucify myself later for saying this, but I hope MS does succeed just to see what MDN has to say then.
Going Down Like a Lead BaZune.
Microsoft does have cachet,
Some people are afraid of apple, and sometimes that fear turns to hate. why? because they know they relate to the tasteless mediocrity of windows and this reflection is hard to take.
in my opinion anyone that buys something just because it has microsoft on it, is a bloody idiot and deserves every second of suffering they endure.
Gee… talk about coming late to the party. I barely use my iPod anymore. Maybe if they came out with an Ipod with WiMax. One that could pull audio and video streams off the web even while out on the road, I’d be interested. Anything short of that… ho-hum.
Dr, I have an itch…um…you know. Down there.
Yes, you’ve got a case of the Zunes. With a smear of ointment and dab of reality, it’ll clear up. I think.
The magnitude of this non-event cannot be over emphasized.
If Microsoft has shown the world anything since the anti-trust trial, it is that they have zero innovation DNA.
Jimbo:
“Even when you spell “shit” with a Z, it still smells the same.”
And if you spell “Zune” with an S, you get, ah… “Sune.” As in, “We’ll see this device Real Sune.”
They’re making threatening noises like they’re gonna ship it in time for the holidays. Any takers that they don’t make that deadline either?
Saying it’s too late for MS is like saying it’s too late for the Mac market. Competition is always good. On a side note, I’m one block from the new South Beach Store on Lincoln road. Hoping to go but it’s raining like crazy here. Hope to get some picts to send in.
…have plans to ready a portable device that will unseat Apple!
I don’t have the corporate largess that Microsoft does? Well, true. But I don’t have the reputation for bloated, difficult to use, software that does a lot of things except what I want to do linked to a virus and spyware-ridden OS.
I may have the lead here.
I love the way the author craps on the idea right off the bat, just to let you know where she stands: “Microsoft refused to provide more details beyond the statement, such as whether anyone in the music industry has expressed serious interest.”
Also, Michael Gartenberg of Jupter must read MacDailyNews, because he voices a lot of concerns in this article that we’ve been raising for several weeks.
Interesting read.
Well it’s like this.
The average iTunes user only buys under 200 songs via iTMS.
So lets say all the billions of songs sold via iTMS that Microsoft has worked a deal with the Labels that they can replace those Fairplay DRMed songs with WMA DRMed songs for no charge.
Then given the fact that M$ DRM has always been cracked.
Also the fact that M$ will bundle their new service directly into Vista, hijacking any iTMS song it can find.
Combined with the fact that music labels want music buisnesses based upon their content TO FAIL, because that’s how they remain in control.
So in conclusion Apple will still kick @$$ because they are coming out with ne wproducts to maintain their dominance and M$ can’t keep up.
Amen Praise Jobs.
One thing is sure, it won’t just be a music player with inbuilt radio/microphone like most of Apples current competiton. It will have lots of whistles and bells. ‘Features’, I think they call them. It will also have lots of buttons and/or options to use those features. It will of course be proprietary… this is Microsoft. And like Apple does with iPod & iTunes, Microsoft can control both the hardware and software.
However, they have loadsa cash and are more than willing to lose a lot of it to gain market share. Xbox anyone?
Despite MDN’s rhetoric, Apple will sleep a little less sound with ‘Zune’ around the corner.
I heard on TWIT that the songs MS would ‘purchase’ for you would only be for the subscription version, not a fully purchased song. Not really much of an offer except for convenience and not worth anything if you don’t want a subscription.
MW: ‘tax’ as in: avoid the MS tax on IT, buy a Mac. Microsoft – Just say NO!
Zune? ZUNE? They are so frigging tacky. God I hate them.
Z as in “Zzzzzzzzzzzz…”
I saw one. It had a dinosaur head on it. Slick.
Although we all know how poorly Microsoft will do at making a successful end-user experience, I’ll recap one of my last arguement on the matter:
Microsoft will use the Vista launch (as they do with every OS release) to leverage themselves into a new market. They will do whatever they can to make the iPod experience poor, and the MS “Zune” experience as smooth and fluid as possible.
And, not only the hardware vendors that should be worried. If I was Real Networks, or any other music download service, I’d be very worried too. It never pays to partner with Microsoft.
at least we know what the Zune Box will look like…