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Zune to face difficulty during holidays

updated 04:35 pm EST, Mon November 13, 2006

Zune holiday difficulty

Microsoft's Zune player is expected to hit store shelves tomorrow, marking the most legitimate competitor to Apple's dominance in the digital music industry so far. Senior analyst Gene Munster of research firm Piper Jaffray believes Microsoft has a lot of work to do before significantly impacting Apple's market share, however. "In the near term, we expect very little impact on Apple's holiday season iPod sales from Zune, given relatively low public awareness at this point," Munster wrote in a research note obtained by MacNN. Microsoft's launch of the Zune player and its music service tomorrow will have limited near-term impact on the iPod due to the initial limited usefulness of Zune's most touted feature -- the ability for Zune users to wirelessly share amongst each other. "If, at some point, there are millions of Zunes in the market, the wireless sharing capability may prove to be a more compelling feature," the analyst wrote.

Munster does not expect to see a material impact on iPod market share from the Zune over the next two quarters unless Microsoft begins a "massive marketing effort" within the next few weeks. "Media and analyst coverage of Zune has been high, but we believe public awareness of Zune is still low at this point and would need to grow significantly in the coming weeks for Zune to have an impact on this holiday season."

Microsoft is likely planning to spend multiple years developing various offerings under the Zune name, according to Munster, which translates into Apple still having clear room to grow its footprint and expand its offerings before Microsoft has a real foundation in the market. "Ultimately, it is possible that Microsoft will be better off for spending several years investing in this initiative, but unless Microsoft makes some inroads against Apple during the investment phase, it may prove to be too late to capture meaningful market share."

Microsoft is stressing the importance of what it believes consumers want in an online digital media service, placing significant emphasis on building an online community. Munster expects community features to become increasingly embedded in various services and devices via Wi-Fi, including Apple's iTunes, but believes the market is device driven and that Zune must capture customers from Apple to be successful.




by MacNN Staff

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Comments

  1. jarod

    Joined: Dec 1969

    0

    Will the real

    idiots please stand up! Let's see how many imbeciles end up buying that piece of s***.

  1. eldarkus

    Joined: Dec 1969

    0

    actually

    I read Walter mosberg's review of it and he had some positive things to say about it, including the interface. I'd certainly like to use one before I pass judgement

  1. MacnTX

    Joined: Dec 1969

    0

    Well...

    I already received an e-mail from Best Buy offering a 12% discount on a new Zune. Doesn't show much confidence in their sales prospects if they're already offering a discount on these things before they're even released....

  1. bsnoel

    Joined: Dec 1969

    0

    Serious Doubts About Zune

    I have serious doubts about the Zune. When Microsoft entered the gaming console market with the X-Box, they had some compelling features that would entice someone to switch or at least reason enough to give the Xbox a serious look. In the case of the Zune, I see no compelling reason to switch to the MS platform. Heck, in my opinion, the Zune is just plain ugly to look at. I would not want to bee seen in public with this thing. It features more restrictive DRM. Itís just plain bested by the Apple iPod in looks, accessories, cool factor, etc. Then there is the fact that many people view Microsoft as a sort of evil corporate entity. Given that there is ample choice in the music player market, that alone will probably make many folks shy away from the Zune.

  1. unclelar

    Joined: Dec 1969

    0

    use for zune

    My bet, is with the ability to "squirt" photo's that don't expire to other zune users, that this device will be very popular with people sharing p***.

  1. horvatic

    Joined: Dec 1969

    0

    Wireless feature is a rea

    Wireless feature is a real joke. You can only share with another zune and it will only play 3 times even if you don't play the whole song and that's it. You can never share that track again. Totally worthless! So far I've heard of nothing but crashes coming from the Zune software as well. This truly is a piece of junk. Or as most people describe it, a t***!

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