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JCPenney's Ron Johnson: 'Customers Don't Get Our Pricing Strategy'After Microsoft adopted a business model that may cut music companies in on the sale of its Zune hardware along with the traditional cut of content fees, the big software company is pushing another feature to grab share from Apple.
The Zune has the capacity to locate other Zunes and then share files with them wirelessly. The iPod cannot make this claim nor can any of its other rivals. The technology draws on features from Microsoft's earlier development of the Xbox game platform.
Many in the portable media player industry have written off the Zune as an expensive endeavor from Microsoft which is doomed to fail because of the iPod's huge distribution base. Of course, a similar case could be made regarding Japanese cars entering the US market in the 1960s.
Microsoft is changing the paradigm of what a portable music player can do and how its content partners can profit. This, at the very least, will put pressure on Apple to consider what it must do to keep its lead. As an analyst from Jupiter Media pointed out to BusinessWeek recently: "Close ties to the music industry could pay off for Microsoft in the short term with exclusive record industry deals. Companies such as Universal, for example, may grant Microsoft the rights to offer new releases earlier than rival services."
At this point, with Microsoft's marketing muscle behind it, the Zune may be changing the landscape for multimedia devices just enough to become successful and bleed off some of Apple's dominance in the process.
Douglas McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
11-13-2006 @ 7:50PM
Delawheresdan said...
Yeah, right! Wifi is simply a gimmick and people want reliable battery life. The screen is nice but the non-techies want something cool and elegant looking and Zune looks too much like a gadget. Techies might have gone for it, but techies are too smart to want something with such limited features. I think Apple marketed their player very well, 20 hours of battery life, 6 hours of video (on the 80 gig model) + games. Now if Zune added Wifi headphones, that would move it into a niche market. Instead of Wifi, they should have added bluetooth.
11-13-2006 @ 9:24PM
Stu Duncan said...
I really don't think it will...
http://www.engadget.com/2006/11/13/installing-the-zune-sucked/
11-13-2006 @ 9:50PM
Stu said...
Yeah, not likely...
http://www.engadget.com/2006/11/13/installing-the-zune-sucked/
11-13-2006 @ 9:59PM
Jarod said...
Get real Douglas. The day those morons at microdump get a clue about anything is the day MAYBE its worth wasting bandwidth on it.
iPod or zune? Which one would YOU buy? I wouldn't be caught dead with anything from ms, esp not something so public.
ms should close shop and avoid itself the avalanch of destruction heading its way in 2007.
11-13-2006 @ 10:01PM
Sambo said...
Hey Doug, you have really become an iPod basher haven't you? Your last articles have "ALL" been on BIG and Powerful ZUNE and MSFT stompin' out poor little AAPL!!! Quite frankly I am sick of your articles, meaningless to me and all who have read the BS! MUST be a stockholder of MSFT and running a little scared are we? You should, I haven't met ONE person having an interest in ZUNE, not even following the big ad annmouncements in this past Sunday paper either on BIG ZUNE. The WI-FI is a joke and so is the music sharing plus the unit is a tank with lackluster colors. You just might want to do some research and follow-up reporting after the BIG ZUNE release! You might be surprised on the iPod sales, not ZUNE'S!!!!!!!!!! Take a break from writing-PLEASE!!!!!
11-14-2006 @ 1:15AM
DB said...
It is totally amazing to me that there actually are REAL Microsoft fans in the world. Why? They've given the world bug ridden software, they've stolen every idea they've ever thought of, and they're slackers to top it all off. Is it simply becuase the IT people of the world depend on those bugs for their livelihood?
11-14-2006 @ 11:34AM
JIM G. said...
I THINK THAT ALL OF YOU WHO HAVE IT IN FOR MICROSOFT
ARE FORGETTING THAT IF IT WASN'T FOR MICROSOFT WE ALL WOULDNT BE BLOGGING TODAY!!!!!
11-14-2006 @ 11:33AM
JIM G. said...
I THINK THAT ALL OF YOU WHO HAVE IT IN FOR MICROSOFT
ARE FORGETTING THAT IF IT WASN'T FOR MICROSOFT WE ALL WOULDNT BE BLOGGING TODAY!!!!!
11-14-2006 @ 1:00PM
Chris said...
As for the last comment, you are forgetting that Microcrap...I mean soft. -- is a GIANT monopoly, we have NO Choice anymore on what operating system to use...Bill and his company should quite bragging how great 'they' are and show it by first lowering there astronomical prices!
Gates needs to give to the poor again its been awhile since he got that great big tax write-off...Anyone rich and actually giving from 'the heart' this holiday season ARE real WINNERS!!
11-15-2006 @ 5:11PM
Zune-Online.com said...
I have some comments on the Universal-Microsoft deal.
It is very interesting. If Microsoft manages to repeat it with other major companies it can change the world of music in a way iPod did.
iPod established a user base that would buy single tracks from the internet instead of buying full CDs or just downloading them from the old Napster and friends.
With Zune comes the social factor. You can buy tracks but you can (in a very limited way) share them through Wifi with friends. Music companies getting revenue from the Zune hardware sales could allow a more open sharing scheme.
I believe after 5-6 major companies embracing this model, the 3 days 3 plays of Zune can be extended to 10 days 10 plays easily or why not 30 days 30 plays.