updated 01:35 pm EDT, Fri October 5, 2007
Column: Zune has no chance
With Microsoft's recent announcement of a second-generation Zune, some are wondering if the new Microsoft PMP has any chance of standing up against the iPod juggernaut. Unfortunately for Redmond, the writing is already on the wall: the Zune is totally incapable of competing with the iPod. Perhaps the most touted feature during the Zune 2.0's unveiling was Microsoft's decision to include a scroll pad that works in a way that's similar to a scroll pad on a laptop. And while this could actually be a viable alternative to the iPod with Video or the Nano, it makes Microsoft's products look outdated when compared to the iPod Touch.
When a person with little knowledge about PMPs (portable music players) goes the store and compares Zune 2.0 and an iPod Touch, it's a safe bet that the iPod will take the day for one reason -- it smacks of ingenuity and cutting edge technology. The Zune, on the other hand, looks like last year's device for almost the same price.
But beyond design differences, I can't understand Microsoft's decision to entirely discard one of the most elementary principles of business and market penetration: when a product is dominating a market, the entrant should compete as well as possible on spec, and beat the leader on price.
When comparing Microsoft's 80GB models with comparably equipped iPods of the same size, you'll find one startling fact: the iPods are $0.99 cheaper. Even worse, the 4GB and 8GB Zune 2.0s cost $149.99 and $199.99, respectively. Compare that to an 8GB flash-based iPod Touch that sports a touch screen and $299 price tag, and you'll find few who wouldn't mind spending the extra $100 for the advanced device.
Unfortunately, the Zune has been stepped over on wireless functionality as well. Microsoft was quick to tout the Zune's enhanced Wi-Fi capabilities and tried to deliver on its promise of making the Zune a better rounded wireless experience. But alas, Zune 2.0 has been trampled by the iPod Touch, which allows access to the iTunes store from any wireless connection, and with the current "three plays and you're done" restrictions on song sharing over Wi-Fi, I can't justify spending hard-earned money on a device that simply can not stand up to the iPod.
In a business where timing is everything and features as well as pricing are the main components of a successful product, Microsoft has dropped the ball and created one of the most reprehensible mistakes in business -- it allowed the market leader beat it on price and spec. If Microsoft wants to enjoy success in the PMP game, it needs to watch Apple, copy its practices, and innovate. If it doesn't, Zune 2.0 will be just another victim of the iPod juggernaut.
Column written by Don Reisinger.