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Analyst: New Zune to harm "Windows" partners

updated 12:20 pm EDT, Thu October 4, 2007

Analyst: New Zune vs. iPod

Microsoft's release of new Zune portable media players are more likely to cannibalize non-Apple players than affect sales of Cupertino-based company's own devices, according to American Technology Research senior analyst Shaw Wu. "As we have long believed, we view the Zune as more of a competitive threat to its Windows Media partners including SanDisk, Sony, Samsung, LG, Verizon, Toshiba, and Philips as opposed to Apple and iPod," Wu wrote in a research note obtained by MacNN. "To us, the portable music player space is divided into two camps--iPod + iTunes (the de facto industry standard) and everyone else." The analyst notes that while Microsoft now has a more competitive product line, it still has no answers to iPhone, iPod touch, and most importantly the new top-selling "fat boy" iPod nano. Wu still maintains his 'buy' recommendation for Apple shares with $185 price target, and says that Apple is set to buck the trend once again despite potential softness in U.S. consumer spending.

"Interestingly, Microsoft is matching Apple with similar price points at $249, $199, and $149. We believe Microsoft is unable to undercut Apple due to Apple's world-class supply chain which gives it access to the lowest cost components, manufacturing, and distribution," Wu explained. "We believe Microsoft will need to price much more aggressively in order to stand a chance against Apple."

The analyst predicts that Zune will likely continue to see modest success due to the Redmond-based company's vast resources and strong brand name, but will do so at the expense of its Windows "partners."

Wu recommends purchasing Apple shares on pull-backs, and sees an upside to $185 in 6-12 months. The analyst also thinks Apple's key competitive advantages remain in the form of a strong brand loyal consumer base combined with its integrated hardware, software, and service model. Further advantages serving Apple are its proprietary interface technologies like the iPod's click-wheel and iPhone's multi-touch display, while unique and pleasant customer experiences within Apple retail stores serve to round out the company's edge over competitors.

by MacNN Staff





  1. robttwo

    Joined: Dec 1969



    So, I wonder what this genius gets paid for this analysis. Why can't I get a job where I can make money by stating the bleeding obvious?


  1. sgirard

    Joined: Dec 1969



    robttwo- You can get a job as a doofus if you put your mind to it. Go to graduate school, get an MBA (with an emphasis in finance) and then compete for the few analyst jobs available with all the other doofus wannabees. I wish you luck and great success in your future career as a doofus.

  1. Feathers

    Joined: Dec 1969


    new terminology...

    Following on from sgirard's "doofus with an MBA" classification, might I add that there are retards and retards who have gone to university(!) that might be called "Unitards".

  1. sgirard

    Joined: Dec 1969



    Unitards! Hey! I resemble that remark! :-)

    And I apologize for being hard on robttwo. If he really wants to become an analyst, I respect that and wish him great success in his career as an analyst.

  1. chotty

    Joined: Dec 1969


    Too Much,

    too Zune...

  1. Kontra

    Joined: Dec 1969


    Zune 2 = Mediocrity

    I wrote about the difference between how Apple designed, packaged and introduced the iPhone and how Microsoft did the same for Zune 2 here:

    "Zune 2: Mediocrity grows on trees"

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