Check out AT&T's FREE camera phonesDecember 6, 2006 11:43 AM PST
Microsoft: Zune sales to top 1 million by June
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The software maker said Wednesday it was pleased with response to the device, which debuted at No. 2 in research firm NPD's weekly sales ranks, but fell to No. 5 last week.
"We're forecasting just over 1 million units for the fiscal year," said Jason Reindorp, marketing director for Zune at Microsoft. "We feel pretty good about that number."
The Zune went on sale in mid-November. In its first days, it ranked near the top of Amazon.com's electronics sales chart. According to NPD's recent ratings, though, it now holds about a 2 percent market share.
Reindorp said sales have been going "pretty well" and are "pretty much on track" with the company's initial forecast. "Microsoft has a very realistic view of the landscape," he said. "There wasn't any foolish thought of coming in and turning the whole market around."
IDC analyst Susan Kevorkian said that the company's projections are similar to her estimates. "We think that Microsoft had relatively modest expectations in terms of unit shipments and sales going into the Zune launch."
Kevorkian said that she expects Microsoft to have sold about a half-million of the devices by the end of December. As a point of comparison, research firm IDC forecasts that there will be 21.5 million hard drive-based music players sold this year, the vast majority from Apple Computer. Microsoft estimates that its better than 1 million devices will give the company about a 10 percent to 15 percent share of the market for music players with 30GB or more of storage. The company also projects that Apple and Zune combined will have 98 percent of that market.
Song sales
Beyond the device itself, Microsoft wouldn't say how many music tracks it has sold through the Zune Marketplace or say how many paid subscriptions to the Zune Pass music service it has sold. However, Reindorp did say that the company has not been heavily promoting the subscription option.
"We're being even more realistic with the Zune Pass," Reindorp said. "Our numbers are really small."
The company said it is seeing a gap between the number of devices that are being sold at retail and the amount that have been hooked up to a PC and activated.
"We think a lot of Zunes are sitting underneath Christmas trees," Reindorp said.
Microsoft tried for years to rival Apple's iPod by offering an underlying media technology that could be used by a variety of music services and devices. However, Microsoft and the industry struggled with compatibility and simplicity. Microsoft decided earlier this year to go it alone with Zune.
The software maker announced plans for the Zune in July, saying the device would stand out from the iPod through a built-in Wi-Fi connection. Although it eventually plans a family of devices, Microsoft opted to start in the U.S. with only a single 30GB device, though it does come in three colors.
The biggest surprise, if any, has been the demand for the brown version of the player. Although resellers generally haven't had trouble keeping any of the Zune models in stock, where there have been occasional supply issues, they have been with the brown model.
"Some (retailers) are surprised how well brown is doing," Reindorp said. "Brown is definitely a polarizing color. You either love it or you hate it."
Software fix coming
Microsoft is also readying its first software update for the Zune. The update will allow the Zune to work with Windows Vista, Microsoft's just-finished operating system, which is now available to businesses and goes on sale to consumers in January.
The Zune software update, which is expected before Christmas, will fix some minor glitches and add some performance and other improvements, Microsoft said. The company won't include major new features in the release, however.
"It is plumbing stuff, but it is stuff customers will notice and appreciate," Reindorp said. "It's not going to be a whole new wireless scenario or anything like that."
But the real question is what Microsoft will do, over time, to expand and improve on its first Zune.
"We'll do more things," Chairman Bill Gates said in an interview last month. "But, you know, we're vague and mysterious about what that is. I mean, but we're not just going to do media; we'll do more."
One thing that analyst Kevorkian expects to see is the addition of video content to Microsoft's online Zune Marketplace. That could take several forms, she said. "Microsoft has some interesting options in terms of offering both user-created and professionally produced video," she said.
The company recently started selling TV shows and movies for download to its Xbox game console. It has also been testing MSN Soapbox, a Web site for user-generated video.
Jupiter Research analyst Michael Gartenberg said that Microsoft needs to play catch-up in other areas, such as support for podcasting and video content. It should also expand beyond a device based on a single hard drive--perhaps moving into a flash memory-based player.
"There is no flash Zune at a time when the (iPod) Nano is just flying off the shelves," he said. "Those are the things they are going to have to address in 2007 if they are going to be a credible player."
Kevorkian said that Microsoft also needs to expand how the Zune's Wi-Fi can be used, probably to allow a direct connection for downloading music from Microsoft directly to the Zune. Gartenberg notes, however, that such a connection is tricky to engineer in a way that is still easy to use on a device that has no keyboard.
Microsoft has said it expects to spend hundreds of millions of dollars over the next few years to develop and market the Zune. "We expect them to devote substantial resources over the long term to carve out a niche for Zune in the portable media player market," Kevorkian said.
In an earlier interview with CNET News.com, Microsoft CEO Steve Ballmer acknowledged that despite the company's satisfaction with the way things are going with Zune, it still has a lot to do.
"We think we have a great initial proposition, and we're happy with the initial response," Ballmer said. "But we don't fool ourselves. There's a guy who's got a lot of share, and we're coming later in the day...So we have our work cut out."
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Gene from ZuneChannel.com
Billionaire BaldyBot must be smokin' crack or something.
"Lots & Lots of them under Christmas trees..."
Sure... I would not doubt that every Microsoft employee world wide will get a brown turd MP3 in their stockings this year as a "bonus" from Secret Santa Stever... THAT WILL BOOST THE UNITS SOLD NUMBERS!
That's so weird! I'm surprised that the brown model is doing better than the black. Although, most people I know who've purchased the brown one swears by it. And a couple of friends of mine are looking to pick up a brown one this year, too.
Personally, I still prefer black, though.
I really hope I'm wrong, and I'll tell you why.
In terms of the iPod and the portable MP3 market, competition has been the only ally of the consumer and I think the only competitor for Apple is Microsoft. Microsoft has the capital, marketshare, and influence to do almost anything they want, but they still have to attach common-sense to those dollars. Creative Labs is doing ok, but not well, and lost a LOT of money trying to fight the iPod (in conjunction w/ Microsoft I might add--anyone remember that??).
I am no FANBOY of either company, but I do think Microsoft is exponentially more powerful than Apple, and can make this work, but I just can't see it.
That's my humble, objective $0.02.
written by M$ dupes, fanboys, or employees. There is no
groundswell of interest in the Zune, and the reason it will probably
fail is because it's not well designed and there's no compelling
reason to choose it over the iPod or even one of the "playsforsure"
players.
But then again, I already have 2 iPODs, so no need for another MP3 player. Maybe people who have no MP3 player will fall for it :- )
Good luck with ZUNE.
this year, I wonder how many will be returned
or exchanged for an iPod?
For all you Zune givers...,
please include a gift voucher!
...simply declare victory, ...even if this claim has simply no connection to reality, what-so-ever. This is a very old marketing-ploy. But, frankly, this approach actually doesnt really seem to work for genuinely -poor products- (especially, if there is any real competition).
And, this latest PR-stunt isnt even well-orchestrated. Apparently, Microsoft simply expects the consumer-market to actually swallow that this product is, somehow, a "success", ...because the product MAY, allegedly at some point in the future, START selling well-enough to meet new, drastically-lowered, sales-expectations.
Right...
Interestingly, Microsoft is also doing this same thing with "Vista". In fact, our company is actually receiving PR-flyers from Microsoft explaining how to deal with the "...overwhelming demand for Vista and Office 2007". But, we are simply dumbfounded by this complete-departure from reality, since NO CUSTOMERS, ...at all, ...seem to, in any way, even remotely be interested in moving to these new "...turkeys".
I think Microsofts absolute-desperation is plainly-showing.
I guess, in the end, it really does appear that if Microsoft cannot artificially manipulate a marketplace, ...they simply cannot, actually, be successful within it.
How sad...
That company was Apple and the product was iPod.
Zune...from what I understand, is the beginning of a family of media products that will all fall under the same banner. With the marketing power and reach of MS I think it is silly to underestimate how far the Zune family may go.
Myself...I'm not a fan of buying music in a format that is going to force me to buy the same brand down the road if I want to keep listening to my purchases so I'm not interested in either (If I had to choose a 30g player I'd probably get a Zen for its format support)
MS Fanboys - you've got reason to be optimistic
APPLE Fanboys - competition from MS will only force Apple to make a better product
It does everything I need it to do, and very well. My Ipod worked well for a long time but I have never liked itunes, especially the fact that it CANT monitor folders on my home server where we store all of our music.
Almost all of these negative comments are about subjective material. Its to heavy or to thick, or why brown....well for some it is and others its not. I have brown and I think its really cool looking. I think the screen is great and the fact that it is really hard to scratch is nice too.
Only time will tell us if the Zune or its eventual family of Zunes will affect Ipod and its market share. I personally think just like almost everything else MS does if they stick to it, it will get better and better and intergrate with their other products eventually and they have mountains of cash to do so with. Its not hard to see this....just look at the Xbox, it had a tough fight and now the 360 probably will be the "next gen" console of choice.
I can easily see a 3rd or 4th gen Zune that is a Windows Mobile 2008 phone as well.
Hmmmm. That's catchy. Wonder where they picked that up.
Amazon.com sales tracker, the Zune is being outsold be every
single iPod model? That's right, every model of the iPod from the
Shuffle to the 80 Gb video iPod is currently outselling the Zune.
This makes me wonder: If Ballmer and Microsoft are happy with
this performance, what kind of sales performance would make
them unhappy? How do they define failure? If coming in at 5th
place among portable MP3 player manufacturers isn't a failure, I
don't know what is.
And what happened to all of the hype about the Zune turning
the color brown into a new fashion wave? The black Zune is their
best seller at around #70 and brown Zune sales are far behind at
around #200 to #300 on the Amazon sales chart. Perhaps we all
fell for Microsoft's marketing hype once again?
pronouncing an unreleased Apple product a "failure" before it
has been confiremed or has shipped.
No wonder peoplehave such a hard time taking C|net seriously -
they're afraid to call the Zune a failure because it might make
their largest advertiser mad, but their Editor will run an
inflammatory article about Apple because it's his birthday and
such articles make people mad.
What pathertic wankers.
devices that are being sold at retail and the amount that have
been hooked up to a PC and activated.
"We think a lot of Zunes are sitting underneath Christmas trees,"
Reindorp said."
I think the answer is more obvious: people have returned the
suspect units after the installation failed, or they found out after
purchase that Vista was unsupported, or that it wouldn't work
with their Mac, or that it wasn't actually an iPod...
The Zune is a failure - but C|net won't say so becuse it means
making Microsoft's ad-buying department unhappy.
Sure, great, yeah, they're on track to sell a million by next summer. Microsoft can loan money to orphanages in Africa to buy Zunes and get a million 'sold' by the middle of next year.
What does that do to the fact that most all the reviews for Zune on Amazon (not written by MSFT employees) say the device is the most calamitously malformed consumer electronics product ever assembled? How does that address the fact that every reviewer not directly employed or paid by Microsoft (there's a story to be written about MSFT's astroturfing sites) regards the Zune as a bundle of pathetic attempts to abuse the customer for every last dime and place them more in the thrall of the big media companies than even the old record labels could have ever imagined in their most diabolical dreams?
MSFT won the operating system market by manipulating the manufacturers and getting them to agree to preferentially treat Windows - (the boot loader issue that many old technologists asked Justice to investigate as the most potent and egregious restraint-of-trade behavior exhibited by MSFT and its unindicted coconspirators) - as the default operating system on most all assembled and shippped PCs. (Justice went for the simpler tale - Netscape, the abused billionaire's toy, was supposedly locked out of the Windows desktop. Sniff. It was so horrible, Judge Jackson. . . so very howwible how they, they bwoke my bwowser, boo-hoo, boo-hoo.)
Culturally, MSFT disdains of actual end users. They are completely beside the point in MSFT's universe. The PC ships with our stuff on it and they have to use it, end of story. Let one tell the boss they want to run Berkeley Unix. Good luck, clownface.
What MSFT will be left doing is throwing more royalties and levy payments to the labels in order to give them the precedents they need to attack Apple for the same fees and break Apple's business model. Again, the user, the technology and the experience are completely out of the picture. MSFT figures once they can bankrupt Apple's business model, they can shovel anything into the void, absorb the losses for years and drive Apple out of the business. The dev people and lawyers in Redmond are no doubt laughing themselves sick all over their Porches for dreaming up this scheme. . .
Predictable.
But Microsoft can't force the labels and consumer electronics companies to both accept a technology suite that bottlenecks the hardware and the distribution of content through MSFT technologies the way that the they managed with the operating systems they license to the manufacturers and, oh yeah, the end users.
Consumers can and do go to a lot of different sources for music and there is little that MSFT can do to change that in the downloadable music space except by buying Apple, Real, MP3.com, Emusic, Napster, Buymusic, AudioLunchbox and eClassical. Even if Justice let them buy a new monopoly they'd still be left to deal with the consumer electronics manufacturers who (like Sony and Philips) have their feet in both hardware and content camps and, of course, the record labels, probably the only industry on earth that can claim to have more diabolically ruthless characters than MSFT.
MSFT wins by creating chokepoints and exploiting them to control markets. The downloadable music scene is just too slippery an environment for MSFT to get a foothold and it's populated by monsters that would make the creature in the Alien movies look like Sister Bertrille.
MSFT, however, will not be able to game the labels they way they ultimately screwed over the PC manufacturers (who now complain all profit in the PC goes to MSFT) smaller companies they 'partnered' with (Latest victims: PlaysForSure partners. PlaysForSure? Wow, the lawyers must have lost another expensive lunch after coming up with that name, knowing they'd abandon it - 'Duh! Don'tPlayNow!' - when they were ready to roll their own player) and the competitors (Digital Research, Lotus Development) that they attacked with market-distorting tactics. (The IBM case - which included Lotus products IBM acquired in the claims - was settled last year.)
MSFT enjoys their badboy reputation because the company is chockablock with hyper-entitled, imagination-free, chair-throwing screaming child men like Ballmer but not in their most caffeine fueled, post-hoops hallucinatory fugue have they ever imagined the kind of monster they are playing with now. The labels will simply decapitate MSFT with endless demands for increasing piracy-levy payments and, finally, punitively expensive litigation if MSFT gives them the opportunity.
After all, the media industry is really one big litigation strategy masquerading as a business model. Before it's all over, it will look like The Flying Nun meets Alien and I know who Sister Betrille is in this analogy.
Couldn't have happened to nicer guys.
- All the ridicule is deserved
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by jeffgtr60
December 10, 2006 10:41 AM PST
- I had my first look at the zune in Best Buy this weekend. It looked worse in real life than in the pictures. The zune has been the subject of much ridicule and the brunt of jokes. After playing around with it I can see why. I don't know of another product that has been so down trodden as the zune. My hunch is that the brand is forever sullied. I think all of the negativity directed at the zune is a sign that public sentiment towards microsoft is very low, if not hostile.
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