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MS pins Zune plunge on old models, economy

updated 08:25 am EST, Tue January 27, 2009

Zune Drop Explanation

Microsoft in an interview published today pins the company's large drop in Zune sales year over year on its model line. The music player division's marketing chief Adam Sohn tells the Post-Intelligencer that late 2007 was going to be strong both because of its then-new second generation players as well as discounted sales of the original Zune 30, which boosted Microsoft's numbers as it was cleared out of stock.

Those original models are no longer there, according to Sohn, who also implies that the 2008 Zune refresh was relatively minor and so didn't jumpstart Zune sales the way the hardware design did when it was new.

The executive also attributes some of the drop to the poor economy and believes the whole category of dedicated media players is on the decline, which he feels affect even Microsoft's market-leading rival Apple. As the Zune is only sold in Canada and the US, it's more vulnerable to conditions than the internationally available iPod, Sohn claims.

"We are in a position where the category is also shrinking," Sohn says. "So I think those are things that affected everybody's sales."

Apple's performance from year to year has nonetheless been significantly different than for Microsoft. Although iPod sales dipped 16 percent, the number of sheer units climbed 3 percent versus 2007 and is said to have given the company even more market share as Microsoft and other competitors' sales ultimately declined.

Sohn also downplays rumors the company might back out and insists that the Zune team is "on track" with more hardware and software and that it will "deliver progress" within 2009.




by MacNN Staff

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Comments

  1. testudo

    Joined: Dec 1969

    +11

    Excuses

    "We are in a position where the category is also shrinking,"

    Yes, as can be seen by the plummeting sales of iPods.

    Oh, wait.....

  1. martinX

    Joined: Dec 1969

    +9

    It's the GFC!

    Must be many crappy sales managers breathing a sigh of relief at the Global Financial Crisis. "Sales are down, Bob!" "Global Financial Crisis, Sir." "Investment returns are c***, Bob!" "Global Financial Crisis, Sir."

  1. Feathers

    Joined: Dec 1969

    +11

    delusional...

    Should somebody that deluded be put in charge of anything. Personally, I don't think they should be allowed to cut their own food!

  1. Constable Odo

    Joined: Dec 1969

    +7

    No mention of Zune

    sales plunge before MS earnings reported. Yet a month ahead of Apple earnings, all the analysts and news media were calculating the death of iPods and that nobody was going to buy iPods anymore. Rampant misinformation in order to drive down Apple shares. MS has been losing revenue, but I don't keep hearing the media screaming about the death of Microsoft. It's always about the death of Steve Jobs, iPods and Apple.

    As much as certain Zunes had been discounted in price, if they were any demand at all, they should have been able to sell plenty. I think it's time for MS to give up on the Zune and let Apple increase it's mp3 player market share.

  1. nat

    Joined: Dec 1969

    +5

    yep

    "it will "deliver progress" within 2009."

    gee, wonder what that will be like - ipod touch anyone?

  1. dimmer

    Joined: Dec 1969

    +5

    For the press?

    That's the most wishy-washy explanation I've ever heard and, I assume, must be for external consumption only. If this is the "real" reason being accepted inside Microsoft the product is doomed.

    Take, for example, "We are in a position where the category is also shrinking," -- that doesn't really mean much when you have failed to get 3% of said market, and of course the market leader is showing higher sales numbers.

  1. Mr. Strat

    Joined: Dec 1969

    +3

    Could they???

    Maybe they could take the remaining inventory and turn 'em into giant Legos or something. They'd work better for that than as a music player.

  1. Eriamjh

    Joined: Dec 1969

    +2

    Reason for Zune drop...

    ...is the Zune itself. It sucks. It ain't no iPod. MS tried to copy Apple and then let its own product languish.

    While I know many Zune owners who are happy with their Zune, I don't know very many Zune owners (most own iPods).

  1. bigpoppa206

    Joined: Dec 1969

    0

    Well, that's what you get

    by naming a product ZUNE! Someone needs to be fired just for that!

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