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Wed, Dec 03, 2008 - 03:44 PM EST  —  AAPL: 94.95 (+2.48, +2.68%)  |  NASDAQ: 1469.73 (+19.93, +1.37%)

Microsoft Zune plummets to 5th place in U.S. digital media player market share with 2.1 percent
Monday, December 04, 2006 - 05:08 PM EST

"Microsoft Corp.'s Zune device dropped to fifth place from second in the U.S. market for digital media players in its second week in stores, market researcher NPD Group Inc. said," Dina Bass reports for Bloomberg.

Bass reports, "Zune captured 2.1 percent of the market in the week ended Nov. 25, said Stephen Baker, an analyst at Port Washington, New York-based NPD, in an interview today. Baker said Apple Computer Inc.'s iPod remained the leader, with 39.4 percent that week, based on units sold."

Bass reports, "Zune's market share declined as SanDisk Corp. boosted sales with a 50 percent price cut on its media players, taking a 39.3 percent share and knocking Microsoft from the No. 2 spot it occupied in its first week in the market. Redmond, Washington- based Microsoft sold about the same number of units as the previous week, failing to keep pace with rising holiday sales."

"Baker said SanDisk typically cuts prices the week of the U.S. Thanksgiving holiday, taking more of the market from Apple than usual," Bass reports.

"Zune took 9 percent share of units sold in its first week on the market, beating out SanDisk for second place after iPod in the week ended Nov. 18. Apple had a 63 percent share that week. 'Second place for Zune is by no means a done deal,' said Michael Gartenberg, an analyst at New York-based JupiterResearch," Bass reports. "Creative Technology Ltd. was third, while Memorex International Inc. was fourth. Walt Disney Co. tied for fifth place with Microsoft. Overall unit sales rose 26 percent from the same week of last year, Baker said. NPD doesn't disclose the number of units each company sold."

Full article here.

"iPods led all manufacturers with 66 percent of dollars spent in the category, while SanDisk had 18 percent. The difference is explained by pricing--the average price of SanDisk players sold during the Black Friday week was $51, versus Apple's $187, due to heavy promotional discounts offered by SanDisk," Erica Ogg and Tom Krazit report for CNET News.

Ogg and Krazit report, "Apple 'actually had a pretty good week,' said Baker. 'Considering SanDisk is out there giving stuff away, selling stuff for $29 or $39 dollars that would normally be $89 or $100 dollars.'"

Full article here.

MacDailyNews Take: All is proceeding pretty much exactly as we've been expecting all along. Redmond's first week fake market share jubilation has been dashed all to hell with utter repudiation. LOL

Note: Regarding the actual market share numbers for iPod, NPD does not report sales from Apple Retail Stores, the Apple Store online, Wal-Mart, or Amazon.com, which, as you might imagine, skews the iPod numbers wildly from week to week.

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Reader Feedback: ( = registered)

Dec 04, 06 - 05:11 pm Comment from: JohnE

Ouch...beat out by Memorex International...what the hell to do they make anyway?

Dec 04, 06 - 05:11 pm Comment from: woof-x

Zuuuuuuuuuuuuuuuuune! Splat!

Dec 04, 06 - 05:13 pm Comment from: SJR

Umm, somebody's math is off, as there is no way in hell that the iPod had 39.4% market share and SanDisk had 39.3% last week. Where are they getting these bogus numbers from anyway?

Dec 04, 06 - 05:16 pm Comment from: AAPL Dude

#75 on Amazon.
Going, going...

Dec 04, 06 - 05:16 pm Comment from: Macatheson

It mirrors human behavior. When oppressed people are down and out and at the bottom of the social pecking order, they put their energy into fighting each other for position, rather than uniting to fight the top dog.

SanDisk may emerge from all of this as the legitimate #2, and may get about 25% of the market from die-hard Apple haters who would rather cut off their own noses to spite Jobs and co.

And all of this is exactly as MDN predicted, so kudos.

Dec 04, 06 - 05:18 pm Comment from: TowerTone

Wal Mart could probably sell more if they didn't have them on the shelf between the Charmin and Quilted Northern...

Dec 04, 06 - 05:21 pm Comment from: RC

Yeah, these numbers don't add up.

So they're saying the iPod dropped from 63% share all the way down to 39.4% last week, while SanDisk went skyrocketed up from 8% to 39.3% due to a price drop??

I'm sorry, but their numbers are total bullsh*t. There is absolutely no way SanDisk sold as many players as Apple did last week, especially considering Black Friday was during that time period.

Dec 04, 06 - 05:21 pm Comment from: R

Now that's what I'm talking about! YEAH!!

FSCK YOU, ZUNE TANG!

Dec 04, 06 - 05:31 pm Comment from: schmluss

I always look at the Sunday newspaper ad inserts to see how a product is advertised. Unfortunately for the Zune, they were onoly in the Circuit City ad as far as Electronics retailers go. They were in the Sears ad and the office supplies ads. Zune won;t sell many at Staple and Office depot. And the Circuit City and Sears ads did not advertise Zune on the first page. You don't advertise what is not selling.

Of note: Circuit City's ad touted Macintosh sales have begun. Interesting.

Dec 04, 06 - 05:32 pm Comment from: tomo

no surprises here!

Dec 04, 06 - 05:35 pm Comment from: Chris

Did you guys read the note about NPD not using Apple Store Online, Apple Store retail, Wallmart, or Amazon.com sales figures?

Dec 04, 06 - 05:36 pm Comment from: R

"Baker said SanDisk typically cuts prices the week of the U.S. Thanksgiving holiday, taking more of the market from Apple than usual."

Maybe the numbers are right afterall. They say SanDisk took heavy slashes in price. And as MDN said, "NPD does not report sales from Apple Retail Stores, the Apple Store online, Wal-Mart, or Amazon.com."

Dec 04, 06 - 05:45 pm Comment from: zune-is-here-to-stay

Lets see you cocky you all are when zune 2G comes out next year and Micosoft basically gives the fsckers away.

You won't be laughing then.

Dec 04, 06 - 05:46 pm Comment from: SirROM

TowerTone wrote: "Wal Mart could probably sell more if they didn't have them on the shelf between the Charmin and Quilted Northern..."

Yeah, but how else would WalMart sell toilet tissue if they put the Zune elsewhere in the store? Can you say MontaZUNEma's revenge? Thought so!

Dec 04, 06 - 05:53 pm Comment from: macromancer

ROFL!

I think i just squirted all over myself from laughing so hard

Dec 04, 06 - 05:56 pm Comment from: Zune Tank

Okay everyone, I admit defeat.

Hasta la vista, social!

Dec 04, 06 - 06:01 pm Comment from: macbones

Again, this is a market M$ must take- and they won't. This will be reflected on as the beginning of the end for m$ as we know it- the crack in the dike so to speak. hahaha. Did I say crack in the dike?

Dec 04, 06 - 06:02 pm Comment from: Zune Tang

This is purely manipulation of statistics. Once SanDisk and Apple stop cheating with their faux price cuts designed solely to bolster apparent marketshare, it will become obvious that Microsoft is really in the lead. The superior design and features of the Zune will win over consumers in the coming weeks. People will finally learn to reject the poorly designed, ugly brick that is the iPod and embrace the intuitive and sleekly designed Zune.

Welcome to the social.

Dec 04, 06 - 06:05 pm Comment from: Big F'ing Deal

Kind of reminds you of Mac's market share.

Dec 04, 06 - 06:06 pm Comment from: edward

I already knew it!

Dec 04, 06 - 06:08 pm Comment from: Fred Mertz

Big F'ing Deal,

Kind of reminds you of Mac's market share.

Except that the Mac has 6% of US market share and is rapidly growing share instead of totally collapsing like Zune's.

Not very reminiscent after all, is it?

Dec 04, 06 - 06:13 pm Comment from: R

"Once SanDisk and Apple stop cheating with their faux price cuts designed solely to bolster apparent marketshare..."

"iPods led all manufacturers with 66 percent of dollars spent in the category, while SanDisk had 18 percent. The difference is explained by pricing--the average price of SanDisk players sold during the Black Friday week was $51, versus Apple's $187, due to heavy promotional discounts offered by SanDisk."

No "faux price cuts" on Apple's behalf.

Dec 04, 06 - 06:15 pm Comment from: LinuxGuy and Mac Prodigal Son

Microsoft seems to think that they will get many chances with new versions of the Zune. But they have already besmirched the brand by collecting almost uniform ridicule. They overcame negative reviews on Windows when they finally won the operating system dominance war in the early 90's, but the Internet has changed the game. The demographic for the mobile media players is well connected to the net and aware of Zune's rotten reputation.

Welcome to the social, Microsoft.

MW: efforts -- as in "All Microsoft's efforts with Zune are doomed to come to nought.

Dec 04, 06 - 06:16 pm Comment from: crazylegslaz

Ouch...oh, and Zune Tang, I think you need some Poon Tang.

Dec 04, 06 - 06:19 pm Comment from: LordRobin

Zune Tang, you're not funny anymore. Please, for the love of God, get a life!

Dec 04, 06 - 06:31 pm Comment from: Randian

Yeah, Zune, even as one of your most staunch defenders, your "shtick" is beginning to wear a little thin. How about a new approach, already?

Dec 04, 06 - 06:36 pm Comment from: MacMental

Why is Amazon selling the iPod Shuffle for $109.95? Wouldn't is stand to reason they would be selling more of them if they weren't over charging by $30?

Dec 04, 06 - 06:44 pm Comment from: WindozeBloze

I have been in five stores that carry Zunes (notice I didn't say "sell Zunes") and I have seen absolutely NO interest by customers in the Zune! Absolutely NONE! Meanwhile I have witnessed at least ten iPod sales during those visits! I doubt that Micro$oft will be boasting about any Zune sales figures any time soon as I am sure that they are quite embarrassing! I'm sure that even Micro$oft's employees prefer the iPod to the Zune!

Dec 04, 06 - 06:46 pm Comment from: David H Dennis

There's no way I'd ever buy an iPod anywhere but an Apple Retail Store. Their service is tops and at their after-Thanksgiving sales event their prices were just about the lowest available.

So excluding Apple retail sales and Apple online sales is going to rip the heart out of the Apple market share. At the same time, since this is a survey of retailers excluding the Apple retail network, this is no surprise and doesn't really reflect on the quality of the survey itself.

Incidentally, my Wal*Mart has the Zune in a pretty good position near the aisle. iPods are stacked up all the way in the back of the section where you can barely see them, with Sandisk and other competitors in the middle. My local Wal*Mart shoppers don't seem to have much interest in either product, but, well, that's Wal*Mart for you.

Wal*Mart's prices are no better than the Apple retail store. Gee, should I buy my fancy electronic gadget from the Apple Retail Store or Wal*Mart? Gosh, that's really hard (laugh).

D

Dec 04, 06 - 06:49 pm Comment from: Thorin

They will drop the price to $149 just like they did

with XBox and sell some more, but it will fail. Selling

XBoxes almost guarantees profit for MS through sold

content. But the content profit margin for Zune will

be very low, as it is for Apple as well. Apple makes

the dough from selling iPods. MS lost money on XBOX (1)

hardware and they will lose money from Zune hardware.

Dec 04, 06 - 07:07 pm Comment from: SJR

MDN didn't post the notes regarding where NPD doesn't pull from until after I had already posted my earlier message....

Dec 04, 06 - 07:08 pm Comment from: Whatever

Is this really surprising?
And besides that who cares?
I couldn't care less for M$...
Screw them.

Dec 04, 06 - 07:12 pm Comment from: dee-oh

Zune in, Zune on, Drop out.

Dec 04, 06 - 07:18 pm Comment from: R

"There's no way I'd ever buy an iPod anywhere but an Apple Retail Store. Their service is tops and at their after-Thanksgiving sales event their prices were just about the lowest available."

I prefer to buy from Target. They have a 90 day return period, no questions asked. Even better than Walmart's 30 day period. Isn't it still 14 days at Apple stores and on their website?

Dec 04, 06 - 07:28 pm Comment from: Alex

MacMental:

Amazon isn't selling the Shuffle for $109. They're having a hard time keeping them in stock. If you look, the Shuffles are being sold by a third party, which is marking them up. When Amazon started selling the Shuffles, they were priced in line with other retailers.

Dec 04, 06 - 07:30 pm Comment from: Jim

People, you have got to hear the utter garbage coming from Ballmer's mouth.

See it for yourself right here.

Click on 'Microsoft boss interview' for a hoot! Imagine having Ballmer as your boss - I just wouldn't be able to take him seriously. As a scouser we are well known for sarcasm, I wouldn't know what to say to him, I'd probably just laugh in his face!

MW: monkey-boy-is-an-ass

Dec 04, 06 - 07:31 pm Comment from: ®

No surprise here. I've gone and tested these POSs. They're a nightmare to navigate. Sure the Wi-Fi thing is kinda intriguing but I can't easily go between son songs and volume and such - I'd say 'Just Screw It™'.

Dec 04, 06 - 07:34 pm Comment from: ®

Yeah and by the way, I checked out Windows Vista this week, talk about putting an earring on a pig!

Dec 04, 06 - 08:08 pm Comment from: Lord Byron

What use is measuring "market share" for just a week?

that's a totally useless stat... just used to write stupid articles

that's like saying i'm the best free throw shooter in the league at 100% going 10 for 10

wait til you get 6 month worth of sales before you start printing "market share" numbers...

why don't they just tell us what Zune's market share was on Saturday from 12pm-6pm?

Dec 04, 06 - 08:10 pm Comment from: GmanMac

How do you even test them out? All the displays I've seen they have them locked down in a vice where all you can do is run your fingers off that junky cheap feeling button "wheel" thingy.

Like who would want to steal that junk anyway?

& I 've not seen a single customer looking at them when I go in.

Dec 04, 06 - 08:24 pm Comment from: Zune Tang

“…fake market share jubilation”?

It’s been a nonstop party in Redmond since the Zune was released. Zune is blowing the competition away and the reason is Microsoft’s not so secret weapon: Points. Who saw points coming? It’s genius. Hey iPodders—do you have points? Nope. Here’s the deal: You buy all of your content at Zune Marketplace with points. You don’t even need money. Try and download music on the iTunes Store with points—you can’t! Zune Marketplace is where it’s at.

Zune shoppers are pretty savvy consumers. They have to be after Apple’s iPod debacle and witnessing the legions of disgruntled iPod users. Microsoft looked at the many mistakes Apple made with the iPod, did their research and innovented the Zune. Microsoft’s characteristic hard work is paying off. The Zune is gaining traction in a way Apple could only dream about. Microsoft will be sure to say “hi” to Apple when they pass them up sometime next quarter..

One last thing: Who the hell is Bloomberg anyway? The IT guys at work said Microsoft’s MP3 player kicks ass, and guess what? It does. I don’t need some namby-pamby “reporter” from some rag nobody’s heard of lying to me about the Zune. Apple's up to their tricks. Again.

Welcome to the Social

Dec 04, 06 - 08:32 pm Comment from: Tempus Fugit

Zune plummets to 5th place in U.S. digital media player market share...

"Everything is proceeding as I have forseen it."
-Darth Sidious

Dec 04, 06 - 08:39 pm Comment from: ChirssyOne

ZT - I think it's becoming a bit of a stretch, even for you.

Dec 04, 06 - 08:51 pm Comment from: not social

Welcome to the social.

Yes, Microsoft, welcome. Meet everyone else at the bottom of the market.

Hey MS fanboys: I thought anything with, say, a 2% market share was "dead". Where does that leave Zune?

Dec 04, 06 - 08:54 pm Comment from: price is right

Lets see you cocky you all are when zune 2G comes out next year and Micosoft basically gives the fsckers away.

You won't be laughing then.


BRING IT!!

Assuming the government doesn't get MS first for market flooding, it'd be a very bad gambit for MS. It'd be like Ford going after market share by handing out cars.

I thought the idea of things like Zune was to help break MS out of their Office legacy rut. If Zune just turns into a hole (sucking money from the Office cow), why bother? Sure there's the bet MS could make money back on music sales, but it sounds like a dreamy long shot to me.

If the Zune ends up free, EVERY Apple fan should get ahold of as many as possible... and scrap them. The more MS money lost, the better.

Dec 04, 06 - 09:02 pm Comment from: Ricochet Rabbit

day after Black Friday....

Electronics Store Manager: Smell that? You smell that?

Newb Clerk: What?

Store Manager: iPods, son. Nothing in the world smells like that.
I love the smell of iPods in the morning. You know, one time we sold 'em for 12 hours straight. When it was all over, I walked up. I couldn't find one of 'em, not one iPod left in the store. The smell, you know that freshly opened iPod box smell, the whole store. Smelled like... victory.

Newb Clerk: What about the Zunes?

Store Manager: Couldn't move that shit with a pound of Ex-Lax.

Dec 04, 06 - 09:04 pm Comment from: up in smoke

It’s been a nonstop party in Redmond since the Zune was released.

Nero fiddles, Rome burns.

ZT, you're worse than an old Nazi propaganda film. You really need to watch more than the History Channel.

Dec 04, 06 - 09:56 pm Comment from: Zunester

I think you're all underestimating the power of Zune...

I have owned 6 different iPods and always felt something was missing.... until I picked up a Zune...

It's more rugged and durable. I saw the brown suede, and I'm not kidding, I was sold! It really is stylish! Even the packaging is elegant. Now I know why Target had a large Zune display.

While I admit that the ability to 'squirt' on my friends is not a killer feature, the large screen and the better feature set along with Zune Marketplace make this a winner! I'd like to make ALL my online purchases w/ MS Points! Why deal in a national currency when you can deal in an international currency like MS Points??

I can't wait to get the Altec Lansing speakers that are available for the Zune. They're WAY cool...

I was so impressed that I bought everybody on my Christmas shopping list a Zune... Great stocking stuffers, er, except that they don't fit in the stockings.....

I think that my purchases may account for the total Zune sales in my county. It's great to be on technology's cutting edge.

I can't wait for J. Allard to announce the 4Q Zune sales. I think the Apple crowd will be SHOCKED at how well the Zune did. He will also announce Zune 3.1, which is when it will REALLY take off! Rob Enderle will surely be reporting live from the event!

My prediction; 'Welcome to the social' will become Time Magazine's quote of the year!

Dec 04, 06 - 10:06 pm Comment from: Man-Ape-Gone-Wrong-Thing

We're number five! We're number five!

Dec 04, 06 - 10:11 pm Comment from: R

I think M$ should continue to be exact5ly who they are. They perpetrated a coup in an unsuspecting market. That will not happen the same way again. Everyone is gunning for them and generally...well...um... they suck.

Yup, bring on Zune 2.0. The second iteration of a dork-named copy that ought to measure up to today's Sansa. I am arousicized because it's zunerific.

MDN "paid" as in pwned.

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