Zune portable music player
Microsoft launched its new Zune portable music player early this month with great fanfare: parties attended by musicians, Zune fanatics, corporate execs and journalists. Maybe they should have invited more salespeople.
Microsoft (nasdaq: MSFT - news - people ) launched Zune and its companion online media store on Nov. 14 to compete primarily with Apple Computer’s iPod music player and iTunes store. But an investor note sent Tuesday from Piper Jaffray analyst Gene Munster had some good news for rival Apple: According to his survey of 40 retailers, only 8% recommended Microsoft’s Zune, while 75% recommended Apple’s market-leading iPod. Apple’s recommendation rate increased from 63% last June and 68% last November.
More alarming are some of the responses when Munster’s team asked salespeople about the Zune. “I’ve never heard of the Zune,” one clerk said. “Who makes that (the Zune)?” asked another. Other clerks promoted some of Zune’s features that Apple’s iPod lacks. “The Zune is the same price as the iPod, but it has Wi-Fi and a built-in FM tuner,” said one salesperson. “I love it; I have it and I love it,” another said.
But is it selling? The Zune has fallen on online retailer Amazon.com’s top sales rankings. On Nov. 16, the black Zune was the No. 7 best seller in Amazon’s MP3 player list, according to Munster. By Nov. 20, it fell to no. 13. Today, it ranks No. 21, behind devices from Apple, Creative and SanDisk (nasdaq: SNDK - news - people ); the top five selling devices are all iPods.
Microsoft’s public relations firm didn’t immediately return a call seeking comment on today’s report, but Cesar Menendez, a Microsoft employee working on Zune, posted a few thoughts about sales to his Zune Insider blog on Nov. 21: “I can tell you that we are exactly where we hoped we’d be. That is, without sharing specific numbers after the first week of sales. We’re all looking forward to a successful holiday retail season. We’re also thinking in long term here.”
Munster rates Apple “outperform” with a $99 price target.
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May 26th, 2007 at 4:53 pm
It’s no secret that the Zune isn’t selling well, but Microsoft has just been awarded a patent that may put a future version of the music player in your car.
Zune radio
The patent describes a music device that can be docked in your car stereo and transfer music and information back and forth between the two. Microsoft has already announced a partnership with Ford earlier this year to put a Microsoft music player in at least 12 upcoming Ford models. If those devices were made standard features, the new music device could easily outsell the Zune in no time.
Ford is said to be putting these into their 2008 lines, so we should be seeing these new players later this year
May 26th, 2007 at 4:53 pm
MS patent leads to advanced phone, Zune car docks
Microsoft is clearing the way for a unique two-way docking stereo for cars, according to a US patent granted to the company earlier this week. Simply referring to a “portable computing device-integrated appliance,” the patent allows for a handheld device to dock directly with a car stereo or similar head-end unit to share its media. More important, Microsoft notes, is the ability for the device itself to send information to the stereo: docking the device could change its display to serve as a replacement for the stereo’s native interface, controlling both its own local files as well as those on the stereo. Using the handheld this way would take away the clutter of an external docking cradle, Microsoft says; though unstated, it would also let owners guard against thieves by removing the main screen and even storage for the stereo.
The patent primarily includes PDAs and smartphones in its patent, suggesting that the immediate intent is to use the technology for Windows Mobile devices rather than media players. However, the patent is generic enough to include most any “handheld computer,” according to Microsoft’s definition. This could include the Zune and other jukeboxes, which could use the advancement through a software update.
Microsoft’s closest real-world application of the patent includes its Sync initiative, which will see special stereos integrate with supporting devices through Bluetooth or USB. However, Sync doesn’t appear to address integration of the portable within the stereo itself and ultimately points to a Sync successor or a newer platform altogether
May 26th, 2007 at 4:55 pm
Pink is No. 2 Zune
Picture
This may indicate strong demand for the color pink, or a lack of demand for the existing Zune colors, but whatever the cause, the “limited edition” pink Zune has become the second-best seller in the product lineup, Microsoft said today in its monthly update on its music device. The pink version, released earlier this month, is outselling white and brown, according to the company. That makes it second only to black.
Meanwhile, Microsoft says Zune market share overall was 9.2 percent in April, among hard-drive based music players, according to NPD data. That’s essentially unchanged from the previous month.