Microsoft To Exit the Zune Business? 361
thefickler writes "According to Microsoft's quarterly filings to the Securities and Exchange Commission, the Zune platform experienced a revenue drop of 54 percent, or $100 million. This compares to relatively healthy sales of the iPod, which were up 3 percent in the same period (though revenue did drop by 16 percent). Obviously, with the recent job cuts at Microsoft's Entertainment and Devices Division, pundits are wondering how soon until the Zune also gets the chop. As one pundit wrote: 'Microsoft, by now, should be realizing that it's never going to be as "cool" as Apple, so why waste its time with the Zune where it has no competitive advantage?'"
It may be folded into the phone devices (Score:3, Interesting)
Microsoft has indicated that they would prefer less manufacturers and models of Windows mobile based phones, so they can make the OS more tightly integrated with the hardware. There have also been rumors that Zune functionality would be folded into the phone, which tends to make sense. So my guess would be they gracefully lose, er...bow out to the iPod and say they are "providing a great combination to their customers by putting the Zune features into the phone."
It's not just about "cool" (Score:4, Interesting)
It's more about making products people want to buy. How many people really want to buy Microsoft products anymore? When was the last time we heard about people lining up to buy the latest version of Windows? The problem for Microsoft is that it has a hard time making products that excite the vast majority of the public, and they've had a few huge mistakes in public perception lately. The Xbox 360 Red Ring of Death was a just a debacle. They shipped a Zune that was less feature-filled than the then current iteration iPod. Don't get me started on Vista, "Vista Capable," and "Vista Ready," or whatever those stupid stickers said.
Sure, Apple products are cool, but they also work pretty well. Why Microsoft didn't look to Apple's or it's own playbook and more closely linked the Zune to the Windows environment is beyond me. This worked for years with Explorer.
Seriously, Xbox games are "cool." I have an original Xbox, and I have been giving Microsoft my $$$ for several years now for my Xbox Live membership. However, I'm just too stingy to give my money to Microsoft for an Xbox 360 after all the hoopla about failure rates. The race to beat Sony to the market was a failure of vision and an appreciation of paradigm shift. There was a huge market for casual gaming that just wasn't going to be satisfied by the first-person shooter, and Nintendo was able to capture it. We can chalk that up to a happy accident for Nintendo executives, but so what?
If a company tries to be all things to all people, it will be unable to do everything as well as companies that are smaller, more focused, or more nimble. Look at General Motors as example number one. Consumers have too much access to information and too many choices. The problem with Microsoft's executive leadership is that the strategic steps they take are, primarily, reactions to market forces. Then, they are placed in the position of having to respond. Why didn't anyone at Microsoft see that Netbooks might one day become popular and have a version of Vista which would run on them? No one? How long was Intel working on the Atom?
Microsoft stocks are, historically, looking pretty affordable right now, but I'm going to wait. I just don't see any game changing ideas coming out of Redmond. Until, as a company, it starts doing something much better than the competition, it will never rise to its former glory days, and its market share and/or profits will continue to decline.
So the revenue from iPods fell 3%... (Score:3, Interesting)
Why not compare revenue to revenue, or sales to sales?
Xbox Fiasco Next To Get Axed (Score:2, Interesting)
The entire Entertainment and Devices Division is going to get a massive house cleaning.
Zune hardware is the first step. It's the easiest to kill off. How much of stand alone portable music player market there will be in five years when so many people are starting to use their cellphones makes just throwing in the towel on the Zune hardware an obvious choice.
Killing off the eight year long Xbox fiasco is next. Microsoft has been consistently killing off or letting go first party developers for the past couple of years. The first party developers are now done to only Rare, Lionhead, and Turn 10. Not the actions of company looking long term to still be in the console market. Other none developer Xbox staff at Microsoft got axed in the recent layoffs and there is supposed to be even more dramatic changes and cuts coming soon.
So far the two Xbox products have racked up over 8 billion in losses over 8 years. Even with the poorly designed and manufactured Xbox 360 hardware Microsoft is still losing money three years into the consoles life. The Entertainment and Devices Division only barely made a tiny profit for 2008 due to absurd accounting games like having the profitable Microsoft Mac software unit placed in the Xbox's division to help hide the hardware losses.
The days of Microsoft being willing to just keep throwing money at the Xbox fiasco are coming to an end. The remaining first party studios should be gone by this year going by the rate they've been closing down or letting go their other studios. The 2 to 3 billion minimum it would take to create another Xbox isn't going to happen. Instead Microsoft will just let the Xbox die out in the market over the next couple years and milk as much money as they can out of the suckers willing to keep paying 50 dollars a year for online gaming.
Re:Just because (Score:2, Interesting)
I agree with you, I hate ipods too, mostly because I hate itunes, but I was never too crazy about the ipod itself, either. I had planned on getting a Sansa, but having a gift certificate at Wal-Mart, I had to choose between a Zune and an iPod. I really like my Zune, though. I've never had any problems with the player, although the software on my pc, since version 2, has been a major headache. I can't figure out what could possibly be uncool about the Zune, other than the fact that Microsoft makes it and it's brown (which is actually an "in" color right now, except for technology). I don't see how the term "dumbed-down" can really even apply to an mp3 player. How advanced can you expect it to be? I seriously, honestly think that 80-90% of the people dissing the Zune have never even used one, and are just jumping on the Hate-The-Zune wagon, which itself is simply riding on the bigger Hate-Microsoft wagon, which is more like a mobile city than a wagon. But having owned both the Zune and iPods, I would make the same choice again.
And about the Zune having DRM (is what I heard), I don't really understand that because it comes with a built-in wireless system so you can share your music with any other nearby Zune. Which seems like the opposite of what DRM is trying to accomplish. I have yet to see an iPod that does that.
What the heck? (Score:4, Interesting)
The idea of the original posting that since MS "only" sold $100M of the devices last year they'll leave the market? Or is it that they'll leave the market because the successful iPod line is eating their lunch? Or is is because we all agree the Zune isn't "cool"?
MS has many lines of business that are under $100M in annual revenue, yet they continue on in those markets, despite not being #1 - I'm thinking keyboards, mice, MS Home Server, etc.
The Zune is a fine piece of hardware, despite the recent bru-ha-ha over the particular model that couldn't handle leap year, and I suspect that MS will lower their investment in Zune hardware development, focus on differentiation on the software side, and (likely) focus on the "self-ripped" MP3 market (as opposed to the $0.99 per-song download market.
A $100M revenue company selling MP3 devices that are tailored to the Windows platform should be a no-brainer, and I believe MS will turn it around. Having said that, my family has all iPods, despite most of our computers running windows...
Mac Business Unit Hiding Xbox Losses (Score:4, Interesting)
I can't imagine what it must be like to work in the Mac Business Unit at Microsoft knowing that all your efforts are going to nothing more than playing accounting games to hide the Xbox disaster.
It is staggering to grasp the magnitude of the Xbox diaster when you look at it:
* Over 4 billion dollars in losses on the first Xbox hardware
* Mac Business Unit moved into the Xbox division to cover up the losses
* Absolute worst and cheapest console hardware ever created with the Xbox 360
* Online fees for everyone playing online games effectively adding 50-150 dollars in extra revenue per console
* Three years on the market
And the E&D division still was only able to post a relatively tiny profit for 2008. Take away the profitable Mac Business Unit, the Xbox online fees, and other profitable parts of the E&D division and the Xbox 360 hardware is obviously still generating huge losses.
I actually own a Zune, and like it! (Score:1, Interesting)
Too many people in the world are oblivious to the fact that there are other options except for an iPod. My wife has a 5 year old Creative Zen 8GB (HD based) that still works fine, and for Christmas she got a 16GB xFi model. We are happy with them. I just with more people would give them a chance.
I think the thing Apple really got right with the iPod is the marketing, and ease of buying songs (though the Zune market place is easy also, and you can buy songs from the Zune if you have WiFi setup on it). I do not think the controls are anything revolutionary, as Creative had a similar control theme before Apple. However, I think that iPod is as synonymous with MP3/portable media players as the name Xerox is with copiers (or at least used to be). I think over time it will change to where the iPod is no longer the dominant player, but it will take time.
Re:this comes as no surprise... (Score:5, Interesting)
For the most part the Zune had to do in a few years what Apple did over five. When the Zune was released in 2006, Apple had over five years of experience designing and tweaking the iPod. It also had over three years with iTunes. The whole ecosystem of the iPod also had to be replicated. That was/is no small task. Also the history of Microsoft suggests that they take a few iterations to get things usable.
The first Zune wasn't bad. The problem was it wasn't great. To beat the iPod, it had to be substantially better. It only offered a few features that the iPod didn't (bigger screen, Wi-fi, radio, sharing) but also drawbacks. Shared music is extremrely restricted. Zune can't be used as HD. The more desired advantages were trumped by Apple with the iPod touch which features a new multi-touch interface that the Zune still doesn't have.
One of the main reasons the Zune didn't do as well was marketing. MS just didn't get it that their other products sold well because people didn't have a choice. To convince people to buy your product over another requires good marketing. So they went with "We're the underdog; let's market our product that way and we'll seem cool. Let's make our commercials oblique and obscure." To their dismay, people have never considered MS the underdog or cool. Their commercials never presented the viewer with a clear picture of what they were advertising.
Contrast this with the iPhone commercials. In the smartphone market, the iPhone was/is new. They had to get people to buy it over Windows CE and Blackberrys and non-smart phones. There were four original iPhone commercials. Each of them showed that (1) it's a phone, (2) some other function (Google maps, browser, plays media, etc), (3) how it works using the new touch interface, (4) who makes it (Apple), (5) where to get it (Apple or AT&T). Each iPhone commercial fulfilled the role of advertising whereas the Zune commercials left the viewer puzzled as to what the message was.
In these hard economic times, it doesn't help that the division that Zune is in a division has not been very profitable historically. In the last few quarters has the division been in the black. With the MSN and Xbox (and now the Zune), the division has been $7 billion in losses since the Xbox was started. That can't bode well if MS is so worried about the future that they've laid people off for the first time. The Xbox 360 has many more customers and is more popular than the Zune albeit it probably costs more. Most likely the Zune will have to be cut.
Fucking bravo, Microsoft. (Score:5, Interesting)
That means Microsoft have not only managed to damage to MP3 market to the extent that Apple "won", but now they're dropping out too. If I weren't convinced they were just short-term reactionary fools I would believe they had it planned all along.
What am I going on about? Well, you see, back in the days just after iPod, Microsoft introduced this thing called PlaysForSure. It was a system to provide a variety of DRM options - single track purchase, promotion with timeout, monthly fee all-you-can-eat, limited play count, and so on. This in itself would have provided a superset of the functionality iTunes provided.
(For the record, where I stand: DRM must die. Three times. Horribly. Preferably acid bath.)
Sounds great, at least from a technical and business standpoint, right? Unfortunately, just to remind us that they're Microsoft, in order to get a PlaysForSure badge on your product, and to be allowed to use the system whatsoever, you have to pass certain certification processes. That includes making sure you have a good startup time, good inter-track delay time, fast database indexing, and so on.
Still sounds great? Aha, but just to remind us they're Microsoft, they're the people that design the protocol, and they make damn sure it's near-impossible to actually implement a good player from it. The database updates and queries are so horribly defined you'd struggle to get good performance out of a proper SQL-like database running on a PC, let alone a tiny little device with 1MB RAM. The requirement to support PlaysForSure means you must use MTP protocol, which is another botched abortion of a protocol. It also requires that if you use MTP you cannot use Mass Storage, further annoying your customers and very neatly if "accidentally" meaning they don't work on Macs. And then there's the encryption itself which is so horribly over-the-top and poorly implemented (you MUST use Microsoft's libraries) that it badly impacts player performance and its battery life.
So Microsoft screw the entire non-Apple MP3 market for a couple of years. Then they bring out their own PlaysForSure player. Except it's not PlaysForSure. You can imagine the language used where I worked (and presumably other companies). They decided that it was too hard to implement their own spec, so they make a player which doesn't comply to it. It's not even in the set at all - it's totally incompatible.
After an electronics-generation of fucking up the non-Apple MP3 market, then screwing up their own solution, and now after (very likely) ditching Zune, they've basically done almost exactly the right set of steps to put Apple into a lead that will be hard to make a dent into.
I stick with my decade old opinion that you don't partner with Microsoft - you watch your back.
Re:Zune is much better than iPod (Score:3, Interesting)
Seeing as the zune and ipod are the same price, why WOULDN'T you pick the zune?
Because there are a lot more accessories and add-ons available for the iPod.
The iPod got off to a good start in terms of market share, which led to more accessories being made for it, which no doubt influenced more people to buy it.... classic positive feedback loop. It's like the OS market back in the 90s, in reverse-- there, Windows ruled the roost and the Mac was a tiny, shrinking niche. Walk into a CompUSA back then, and nearly everything on the shelves was for Windows. The Mac section was three shelves in literally the farthest corner of the store from the entrance.
With the Zune, instead of being the 800-pound gorilla in a given market, Microsoft is finding out how much fun it is to have to compete against that gorilla.
~Philly
Re:I actually own a Zune, and like it! (Score:3, Interesting)
Until very recently, I owned and _LOVED_ a first generation Zune 30.
The Zune software makes iTunes look like an Excel spreadshet, is much lighter weight than iTunes, and includes features (group mix) that I actually like and used.
Eventually, though, I sold my Zune 30 because I was tired of having to hack it to get it work with my installation of Windows XP x64. I'll never understand why Microsoft intentionally left XP x64 out in the cold, but they did so I had to move on.
I replaced it with a Toshiba Gigabeat S60, so I essentially still have my Zune, with an upgraded hard disk size and minus the WiFi (which I rarely used anyway).
If Microsoft made the Zune compatible with XP x64 (officially), I'd be a Zune owner again in a heartbeat!
Hoist by your own petard (Score:3, Interesting)
So, MS only drivers, no Playforsure support and no Apple protected ACC support. Of course of this would have been a non issue if MS supported universal standards(a media player does not need customer drivers if it is just treated as removable drive) and if MS focused on DRM free music. In fact the primary driver that kept Apple in the forefront for so long is the music industry insistence on DRM and the computer industries support of that position. We will see how apple fares now that Amazon has cheaper drm free music, but I think Apple will be ok now that people are used to used going to iTunes.
But I don't think that MS has to exit the market, just remember that the pupose of MS is to provide the low cost option. The Xbox is successful because it is the cheaper than a PS3, as the xbox has no HD media capability. The Zune is not cheaper than any iPod, except for the touch, so why buy it. If a PC were as expensive than the mac, how many people would buy it? Sell a zune for $100, and it will be on the top of the charts, just like the xbox. Or they could do something innovative and include wireless cell phone access, like the Kindle, and inlcude one year of subscription service. But that would innovative, not what MS does.
Re:What the heck? (Score:4, Interesting)
According to TFA, Zune revenue wasn't $100M, the drop in Zune revenue was $100M, which is a 54% fall.
By extrapolation, this suggests that last year's revenue was around $185M and this year's around $85M.
That may be, but it's not a question of revenue but of margin. Keyboards and Mice (which MS makes quite well) are quite likely moderately profitable lines. But doubling profit on them (or elimintating them altogether) would have no effect on MS' botom line.
There is no way the Zune is even close to profitable based on these sales numbers, and based on various figures that have come out concerning Zune development.
It doesn't cost that much (relatively) to spec out, manufacture, and rebrand Logitech hardware. It does cost a lot to design, develop, distribute, promote, and maintain a device and platform like the Zune. $85M, or even $100M a year is not going to cut it, particularly when the market has spoken and given MS a much smaller piece of a rapidly growing pie.
The Ford Pinto was also a fine piece of automotive design, despite the bru-ha-ha over the particular model that couldn't handle a rear-end collision without exploding.
It's isn't that the Zune is a bad product or poor design. It's that it isn't cheaper, better, easier, faster, or more convenient than the alternatives. You can argue all you want, but the market has spoken quite clearly on this point.
This is a concept I've never been able to understand. Why on earth would someone want to make (or buy) a device that only works on one platform, when similar devices work with any?
Particularly when there is little the manufacturer needs to do to ensure cross-platform compatibility. How much did Apple contribute to the development (or suppression) of Gtkpod?
The fact is that MS' Entertainment (or whatever they're calling it today) division has been a money-sink from day one -- full of confusion, odd rebranding decisions, failed initiatives, conflicting projects, lack of focus, and several hardware fiascos -- most notably the XB360's red-ring-of-death and the Zune's leap-second crash.
If I was a MS shareholder (and hadn't sold out long ago when they stopped performing), I would be apoplectic about a lot of these initiatives.
There is a time to cut your losses, consolidate your position, and focus on what you do well. MS has never been able to do this and I doubt they will start now, although in the case of Zune (and probably MSN) it would be the wise thing.
Re:this comes as no surprise... (Score:3, Interesting)
I must be the only one here that has owned and used a Zune. I won the Zune in a drawing at a MS Luncheon for Server 2008.
I must say, I put away my iPod Nano, and am now using the 8gb Zune.
The audio quality is a bit better, missing the EQ though. The FM receiver does work quite well in the metro area.
The one thing I was surprised about liking is the user interface and the touch sensitive pad for controlling it. I can still load MP3's without DRM, and use it to my hearts content.
Still not sure if I would have bought one on my own, but after owning/using it, I would not rule it out now.
Just my .02, and no, I am not a MS fanboy. I use a MacBook Pro, running both native apps, and a Windows VM.
-Ryan
Re:Apple exiting iPod classic market (Score:4, Interesting)
Apple hasn't changed the ipod fundamentally since they introduced the color screen and videos.
O RLY? [wikipedia.org]
I guess Microsoft's strategy to fight iPod could involve merging Zune into Pocket PC.
Re:this comes as no surprise... (Score:5, Interesting)
You raise two interesting questions. a) What constitutes the perfect pmp (or to put it another way, the most desirable pmp) and b) will they become irrelevant as more phones morph into music players? The whole drm thing is a side issue. I can't think of any player that won't play drm-free mp3's - even the zune. The pmp manufacturers don't give a crap about drm but have to include it if they want to have a music downloading service because the record/movie companies demand it.
It looks to me like pmp market of the future will become be divided into expensive high end enthusiast devices and ultra cheap low end mass market devices, with the much larger middle ground being taken up by combination phone/pmp devices. Everyone carries a phone and it doesn't make sense for people to have two boxes to tote around just to listen to music or look at video. Regardless, most players work pretty much the same - they play music and video. How they do it is irrelevant as long as it's simple and makes sense to the end user.
What we end up talking about is really the music management software and associated music sales/downloading services. Ipods/phones/tunes already have a massive lead in this area in terms of seamless integration and a one-stop shop. Apple created the market and do a good job of making sure they remain the best. It's hard to imagine any company being able to outpace Apple on both hardware and software/services such that people see a clear advantage. How could Microsoft really hope to blow away Apple on both hardware and software/music services? Apple is more than good enough to make it impossible. Hence the market stays fragmented and Apple centric.
My Zune Prediction From June, 2006 (Score:5, Interesting)
Keyword graphs show the story...
http://www.realmeme.com/roller/page/realmeme?entry=zune_meme_rerun [realmeme.com]
Microsoft entered a market nearing its growth inflection point with a marginal product. They thought they could win through hype and Microsoft branding.
Microsoft Vista is failing for similar reasons.
I used to be just like you. (Score:5, Interesting)
So I got the iPhone 3G. My Zune was then in the glove compartment of my car for a few months. I pulled it out a few weeks ago to try out the Zune games that seemed to be taking off. What I used to think was a sleek, intuitive interface on the Zune now looked clunky. The entire device actually felt cheap. The Zune hadn't changed though - I did. I got used to the iPhone. But anyway, I upgraded my Zune firmware, installed the Zune Games and actually tried the default ones out. Texas Hold'em was actually fun. But man, the experience is nothing - NOTHING - like the iPhone.
I guess I'll try selling my brown Zune on eBay before they become totally worthless.
Re:this comes as no surprise... (Score:5, Interesting)
I have neither a Zune nor an iPod. So I might not know what I'm talking about. But on the other hand, I don't think I have any entrenched bias. And I've done a little googling. So take this reply in that context.
My understanding is that most of the restrictive Zune DRM has to do with the WiFi "squirt" feature. (Obviously this crippled what could have been the Zune's killer feature.) But iPods have no wifi at all; it seems silly to argue that iTunes DRM is less restrictive because it does not prevent you from doing things you couldn't do anyway.
As for moving music around, in some ways the Zune seems better. Music goes onto the iPod and never flows in the other direction. By contrast, you can move non-DRMed files from the Zune back onto your hard drive.
The burn-rip argument I dislike because (1) it degrades quality and (2) consumes media. More, it's nearly* just an application of the Analog Hole (I say "nearly" because CDs are digital. But you're still transcoding between lossy formats, which degrades quality), which of course exists for any device -- Zune, iPod, or some hypothetical completely-and-utterly locked-down player. But that said, it seems that you can burn CDs from WMAs from Microsoft's store too (Caveat: An option exists in WMA files to prevent users from burning them to CD. But it appears not to be in use anywhere.)
So I'm not seeing a clear win for Apple in DRM here.
But I think the most fundamental argument is: It sounds like you're saying Apple has "good DRM." Can such a thing exist?
Re:Fucking bravo, Microsoft. (Score:5, Interesting)
So Microsoft screw the entire non-Apple MP3 market for a couple of years. Then they bring out their own PlaysForSure player. Except it's not PlaysForSure.
Yes, I still have a hard time understanding what Microsoft thought they were doing there. They screwed all their partners there by destroying the idea of PlaysForSure, in that suddenly those songs wouldn't play, at least not for sure. Putting "PlaysForSure" on any product after that was a joke.
I've also thought, in hindsight, that people have greatly underestimated the degree to which Apple hurt Microsoft with the iPod. Most people used to talk about the "halo effect", meaning people would like their iPods so much that they'd be interested in looking at other Apple products, but there were much bigger problems than that.
Microsoft put a decent amount of money into developing Window Media formats, promoting them, pushing support onto every product they could, and selling media companies on the idea of DRM. Most people are quick to note that Windows Media gives Microsoft increased vendor lock-in, since they didn't provide or allow support for other platforms, but it did much more than that. It allowed them to create strategic partnerships with large media companies, and more importantly let Microsoft get their hooks into all sorts of other markets. If they owned WMA and WMA was *the* audio format people were using, then they could own the MP3-player market as well as the cell phone market for phones that would provide media capabilities. Likewise, it could give them an edge in competing in devices like consoles or set-top boxes that might include media-playing capabilities. Further, any embedded systems (e.g. computerized audio systems in cars) would potentially be forced to license the embedded version of Windows. All of these sorts of things apply for video, too.
But apparently someone at Microsoft was snoozing and didn't notice that the iPod was growing in popularity. Since the most popular MP3 player didn't support WMA, it meant that people weren't going to rip their audio collections as WMA, and also they weren't going to be buying those DRM-wrapped WMAs. Since the only DRM they did support was one that no other online stores could use, the record industry was eventually forced to drop DRM, which then lead to an even bigger problem for Microsoft. The great selling point for WMA was that it allowed a nearly universal (except for on the iPod) DRM technology, and not much else. I can only guess that this damaged Microsoft's leverage with media companies, but more importantly it means that it doesn't make any sense to sell WMAs on online stores. The only sensible formats to use for online stores are MP3 and maybe AAC.
Further, since people are much less likely to use WMA, the benefit of providing support in consumer electronics and embedded systems is virtually neutralized.
Sorry for the random (and poorly organized) rant, but I thought it fitting to provide some context. It seems to me that the Zune really wasn't some random unimportant side-product for Microsoft, but rather a desperate attempt by Microsoft to rescue a lot of their work in developing control/lock-in in a variety of markets. I think that, if they're going to drop the Zune, they may be on their way toward abandoning the media dominance they've been chasing for several years.
Re:I used to be just like you. (Score:4, Interesting)
So I got the iPhone 3G. My Zune was then in the glove compartment of my car for a few months. I pulled it out a few weeks ago to try out the Zune games that seemed to be taking off. What I used to think was a sleek, intuitive interface on the Zune now looked clunky.
The same thing happened to me, as well. The only thing I miss (and probably you do to) is the huge amount of storage space the Zune has, compared to the iPhone.
Re:I used to be just like you. (Score:1, Interesting)
The latest Opera Mobile for PocketPC actually gives iPhone a run for its money, IMO... So much that lots of WinMo vendors now include it as standard. I haven't touched Pocket IE in a very long time.
Re:Zune is much better than iPod (Score:2, Interesting)
> Seeing as the zune and ipod are the same price, why WOULDN'T you pick the zune?
1. It doesn't implement the massdrive USB spec -> Not possible to use as a harddrive (which is especially bad for the large-capacity one); there are drivers to download which makes it possible but it still means I cannot just plug it into any old computer and use it for files.
2. Calendars, addresses and notes: I use this functionality, especially the notes thing where you can hyper-link notes internally and to music/video on the drive. Geeky, yes, but for me it's useful. (Caveat: I haven't tried the newest firmware for Zune so these things might be available now.)
3. I live in Europe -> Can't buy a Zune
4. I use a Mac now and then -> Can't use the Zune with it
But of course my reasons might not be interesting for you, and instead the FM radio, Wifi etc. on the Zune, and if so you should definitely avoid the iPod.
I only wanted to mention that there are actual, feature-based reasons why someone might want to get an iPod rather than a Zune. And of course this comparison is only interesting for iPod Classic / Nano; iPod Touch is something else completely. I strongly suspect that iPod Classic is not selling that much any more...
Zune was never going to work, heres why... (Score:4, Interesting)
The zune was never going to be a the ipod killer that MS hoped it would be and it is difficult to see why MS entered the market.
Basically if you are going up against the gorilla that is Apple in the ipod market, you have to have something that differentiates markedly. The only thing the zune had was the wireless sharing. However two problems with that. Firstly it was hopelessly crippled by MS usually DRM fan boys. Secondly it relied on enough mass usage of the zune so that there was a chance someday you might meet another zune user. If you took that away you were left with a nice MP3 player competing with all the other nice non apple MP3 players in a sea made by Apple. And remember an ipod is not just a music player but is the focal point of a whole industry providing ipod addons. Zune never had a chance.
The question is what could compete with ipod? History has shown that it would either take a whole new technology shift(wireless music ???) or Apple to make a mis-step. So far Apple has shown they are not likely to do the latter, in fact you have to be impressed how they do not sit back and wait for the competition to catch up, but are constantly pushing the envelope. This makes it very hard to compete against. You only have to look how a few months after the zune was produced apple produced the itouch so totally changing the market before the zune ever got going.
So what about MS. Probably what they should of done instead of spending millions on Zune was got into phones. Here they have a slight advantage in that their software runs the corporate world so if they made a phone that seamlessly connected then corporate world would probably buy a few.
However even here they have a few problems. Firstly it would eat away at their mobile OS market, since they would be competing against the same people who buy there software from them at the moment. This would almost certainly push these same manufacturers to android and the like.
Secondly MS hardware sucks. They just do not have the ability to integrate the software and hardware into one unit, in the same way apple do. This must be partly to do with their reliance on 3rd party hardware suppliers to do the hardware design, then having to fit their software to it.
In the end of the day, MS should really concentrate on doing what it knows best, making operating systems for gray boxes
Re:are you kidding? (Score:4, Interesting)
Blaming Microsoft for the fact that Apple doesn't support MTP is ridiculous. Apple locked down iTunes so that you can't really use it with other players, and they tried to lock down the iPod so that you can't use it with other music management applications.
You missed my point. They specified that you can only use MTP and no other protocol. You were not allowed to have a dual-protocol device, which was perfectly possible. Of course, they eventually settled for allowing this, but not before the damage was done - vendors implemented MTP instead of the ubiquitous Mass Storage (MSC) and when you've got limited resources to do things, you settle for one protocol. So a mass of MTP devices appeared, which neatly didn't work on Mac.
And, of course, just to let us know they're Microsoft, MTP wasn't supported unless you had Windows Media player 9 installed. And of course, WMP9 wasn't supported unless you had Windows XP installed. Very neat.
I was there when this all happened and it was as obvious as a 100ft tall pink elephant. They got away with all this crap simply because the US and EU were busy with the bigger fish of browsers, openness, protocol compatibility and all the other monopolistic practices. I don't see why you should give them the benefit of the doubt here - there's decades and hundreds of examples of Microsoft doing the same thing over and over. This is no different.
As for "screwing the entire non-Apple MP3 market", I think you give Microsoft too much credit; Microsoft has had virtually no impact either way. If you want an MP3 player, there are plenty of choices that cost almost nothing.
You are wrong. If you are a non-Apple MP3 manufacturer you must go with PlaysForSure. It's a tick-box. The mass market wants tick boxes, and customers wanted P4S. If you didn't have P4S, you didn't sell. It's sad and believe me it's true. Microsoft screwed the market by crippling all the non-Apple vendors with a shitty product.
MP3 players are dead anyway; like PDAs, they are just becoming part of phones.
That is patently untrue. There are so many factors which will ensure they'll be around for years. Form factor is one. Price is a fucking obvious one too.
Also notice that the phones which list music playback as a strength have all gone with their own implementations. Notice how big the companies are that had the guts to do it: e.g Nokia. Sadly we're left with a bunch of walled-garden solutions, iTunes included.
would be a first for them to cut failing business (Score:3, Interesting)
It would be a first for them to cut failing business which was created to keep a competitor in check. Microsoft has many money losing businesses, ones which lose billions annually but their purpose is not necessarily all about being profitable, it's about limiting the growth of the market leader. Windows CE was created to slow or stop Palm's growth beyond the PDA and Microsoft has lost over $15 billion on that. The Xbox was created to slow or stop Sony from growing the PlayStation market beyond the console and Microsoft has lost many billions on that. The Zune was created to slow the Apple iPod market and they've lost a billion or two on that.
So with Steve Balmer still in charge and the Windows OS making up over 80% of Microsoft's profits and with huge profit margins, there is no history to show a willingness at Microsoft to cut any of these market protection based projects. Cutting the Zune would probably be the first one to be cut and not succeeded at its goal. IMO.
LoB
Compete on price (Score:2, Interesting)
What I don't understand is, why Microsoft hasn't (That I have seen) tried to compete on the Zune's price with the iPod. Every time I've ever looked at a Zune, it has always been more expensive than an iPod. As stated, Microsoft won't be able to compete on the 'cool' factor. But essentially, what is a Zune or an iPod? It is the size and capacity of these devices that has always been a winner.
In New Zealand (Where Zunes aren't available), you can't really get a high capacity (Over say 8/16 GB) portable media player at a reasonable price, other than an iPod. So if you're after a large capacity, small portable media device, you'll look at your options:
1) Does it play MP3s? (And this would now be, Does it play video. h.264 MPEG-4 has won that battle, so don't try to fight a format war).
2) Which is the cheapest one that supports the features I want?
Microsoft needed to under cut Apple on the price. They have deep enough pockets.
What about Sony? (Score:2, Interesting)
Re:What really runined it was... (Score:2, Interesting)
Considering the brand new music "service" they are just rolling out, it's no wonder their music-related project's are dying.
http://arstechnica.com/news.ars/post/20090123-microsoft-misses-memo-launches-drm-laden-mobile-music-store.html [arstechnica.com]
If the MS manager did actually have those responses (which seem to be, we came up with this idea ourselves, years ago, but we finally could launch it now, we'll fix it later, and no, we haven't done any consumer studies after the initial one we did 4 years ago when the project began), I would have to believe his name went on the MS layoff list...
Re:Fucking bravo, Microsoft. (Score:2, Interesting)
This in itself would have provided a superset of the functionality iTunes provided.
What do you mean "would have"? PlaysForSure still exists and it provides all the features you mentioned. Personally, I don't like the "paid subscription" model of Janus, but others do and it works.
Your whole rant is wrong-headed. For obvious reasons, you can't use Mass Storage Mode for the PlaysForSure subscriptions because in the name of DRM they can't let you have access for the actual files. MTP is well-documented, it's just fundamentally more complicated than Mass Storage Mode which uses very well-known MS interfaces. And as you pointed out, the stupid DB and encryption requirements of PlaysForSure priced it out of cheap devices. All of this is true to a MUCH GREATER EXTENT with Apple's DRM.
As I've said many times in the past, I strongly prefer MS' DRM solution for the SOLE reason that it's somewhat easier to remove. I happen to know this was deliberate.
After an electronics-generation of fucking up the non-Apple MP3 market, then screwing up their own solution, and now after (very likely) ditching Zune, they've basically done almost exactly the right set of steps to put Apple into a lead that will be hard to make a dent into.
The market is transitioning to cheap Asian players from SanDisk and other players and DRM-free MP3s. The Zune is doomed as an audio player for this reason. I would very much like to give credit to MS for this by saying that their crappy DRM led to this. But MS, quite obviously, never wanted this DRM crap. It was the label's insistence on unreasonable limitations and the inability of ANYONE to make those limitations user-friendly that led to the transition to DRM-free music.
Don't worry, they're bringing it back for video. Apple isn't stupid. They know that the end of DRM on music will free their customers from the iTunes straitjacket and free from that they will prove very reluctant to pay Apple prices for mere audio players. Expect the Shuffle and Nano (and anything audio-oriented) to be discontinued in 2 years. Apple sells video and internet devices now, audio is an afterthought.
The same applies to MS. MS is pushing their downloadable video in a big way. The Zune 3, if it's released, is likely to be a video player.
Re:would be a first for them to cut failing busine (Score:3, Interesting)
they cut Pen for Windows too but that was after they pretty much killed the one company at the time who was really building momentum, Go Inc. As far as Mac based apps go, Microsoft has very little strength or leverage on that platform. There is only Apple distributing and they have their own stores. Is Flight Sim really in a market which has or had the ability to threaten Microsoft's market position?
There is one app, Microsoft Money, which was threatened by Intuit's Quicken. Microsoft tried to tie MS Money to other products to beat Quicken but for some reason that failed. But then again, Quicken has not done anything to threaten Windows, they pretty much only support Windows and have a half effort still doing a Mac app. If they came out with a Linux version, MS would pull MS Money out or back one of the others and spend a couple of billion trying to knock Quicken down.
So while the iPod market still gets into many many Windows users hands, brings in Apple iTunes, and puts that pretty Apple logo in their mind for the next time they want a new PC. Well I just don't see them dropping the Zune. The iPod market is too big of a market threat to Windows to just leave it all alone. I don't think they'd ever drop the Xbox or MSN and their search. I'd me very surprised if they did drop it while the iPod still dominated the market.
LoB
Zune Marketplace (Score:2, Interesting)
I bought an original 30Gb refurbished Zune last year. I don't use it a lot, but when I do I enjoy the experience, I have put videos on it for my daughter (3 years old), pod casts, pictures, and any music that I want.
Two months ago Microsoft changed the details of their Zune Marketplace subscription offereing unlimited downloads for $15 per month. Not too different from Rapsody and the such, however there is a silver lining, you also get to download and keep 10 songs per month which they remove their DRM from. Some music is also in mp3 format. That 10 songs sold me on that subscription and I signed up, and have taken advantage of the service as much as I can. (BTW you can use the service on three PCs and two Zunes) Maybe it is just a ply to increase their numbers, but it worked for me.
Personally I hope they don't can the line. They have some work to do, but it is a solid product, just not as "cool" as an iPod.
Re:Mac Business Unit Hiding Xbox Losses (Score:3, Interesting)
If it doesn't balance, it shouldn't be on the market.
Complete nonsense. A company can put out any product it wants. If it wants to lose money on it, there's nothing preventing it.
Seekret seekret. Lots of things are in name only.
Seriously? That's your only reply? Not even a link? And you want me to take you seriously?
Just because a few were bad doesn't mean you have permission to be 3-4 times worse (PS2 failure rate = 9%, 360 = ~33%).
I have yet to see any real data on xbox failures. Care to link one? Or is this more forum drivel perpetuated as truth?
PC gamers, with the exception of MMORPG players, don't pay fees. Neither do playstation players. Neither do Nintendo players. Neither did dreamcast players.
And yet, the only people complaining about the Xbox fees are playstation fanboys. Weird, uh?
Good, because both will go bankrupt and by that time there will be a new startup to challenge Nintendo with a slightly less crappy business model.
I can only hope so. In the meantime, I'll enjoy my Xbox until something better comes along.
I've had the Zune, iPod Nano/Video, and iPhone (Score:3, Interesting)
I bought it originally because I had a PC and I thought it might work well with MediaPlayer. I was right and I was wrong. Under the first version (I think 9) it worked ok, but once I upgraded to the suggested MP10, it was a huge pain. I think the video was originally a nice feature, but again, DRM made things a pain. I had music I legally owned that it wouldn't play.
Then, of course, accessories were next to impossible to find. Want a rugged rubber case (like my zCover for the iPhone)? Not going to find one (at least not in your first 5 stores you visit). I walked into Fry's, which is a geek supermarket on steroids, and they have one shelf (back then). Now there's maybe a little more, but you'll find two AISLES of stuff for the iPod.
When the iPhone came out, there was finally an iPod killer. Zune made a great try, but it's M$ after all. They had to keep corporate interests. Now my iPod Video sits on the shelf, while I go everywhere with the iPhone. I'm listening to it right now at work.
One last thing killed the Zune for me. "Lock" doesn't. Yeah, I can't change songs, but the unit powers up to show you the lock symbol, which the iPod doesn't do. May not sound like much, but I make a 4 hour ride monthly on my motorcycle. With the Zune in my motorcycle jacket pocket, set to "Locked", the unit would die far before the end of my ride. The unit would get touched, power up, show the "locked" for awhile and then power down. I can make the 8 hour round trip with my iPod and iPhone set with the lock on.