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January 17, 2007 12:00 AM

Microsoft: Zune was Number Two During Holiday Season

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Today, Microsoft announced that its Zune MP3 player was the number two selling device in the hard drive-based MP3 player market for the month of December, the first full month of Zune's availability. Microsoft says that Zune accounted for 10.2 percent of all hard drive-based MP3 player retail sales in December, behind Apple's dominant iPod.

"We're happy to report that we achieved our goal of establishing Zune as the clear number two seller this holiday behind an entrenched competitor," a Microsoft representative told me Wednesday evening. "No other single device has been able to achieve these kinds of results in a six week launch period and we remain on track to exceed one million units in sales by ... June 30, 2007."

Microsoft says it sees enormous potential in the digital music space and it is using a three-year plan to solidify its position in the market. Additionally, Zune-related sales are strong too, Microsoft says. The Zune Marketplace, Microsoft's online store, saw "exponential growth" for both individual tracks and full album downloads, which makes sense considering the service was just launched in mid-November. Microsoft also notes that the Zune Pass subscription service doubled between November and December.

Though Zune doesn't enjoy the level of support enjoyed by the iPod, Microsoft also says that its device is supported by a robust line-up of accessories from a variety of add-on makers, including Harmon Kardon, Griffin, Belkin, and many others. And automobile makers--notably Ford Motor Company--are starting to deliver integrated Zune solutions as well.

Microsoft's Zune was widely panned when it was originally launched because of its lackluster feature set when compared with the iPod and the lack of podcasting support, downloadable movies and TV shows, games, and other features. However, Microsoft has cautioned analysts and reviewers that its original Zune device is just the first step: The company plans to add features and new models in the future.

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Comments
  • cesjr
    5 years ago
    Jan 22, 2007

    NPD has corrected the article and reports that Zune got only 10.2 percent of 30 GB hard drive players (an odd concept of market share since 20 GB or 40 GB players would not be counted, or 60 or 80 gb ones.

    http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=54163&Nid=26731&p=291151

  • Vandil
    5 years ago
    Jan 19, 2007

    Of course the Zune was number 2... especially the brown model (iPoop).

  • Derek
    5 years ago
    Jan 19, 2007

    Microsoft says; "No other single device has been able to achieve these kinds of results in a six week launch period and we remain on track to exceed one million units in sales by ... June 30, 2007."

    Only 1 million in sales by July?

    http://en.wikipedia.org/wiki/IPod#Sales

    21 million plus iPods sold thus far in Q1 of 2007, and counting. That's just one quarter.

    Microsoft says; "We're happy to report that we achieved our goal of establishing Zune as the clear number two seller this holiday behind an entrenched competitor"

    Let's not downplay reality here, Paul / Microsoft / MS fanatics. Success, is breaching 20 million plus units sold in a single quarter. Sony would be happy to hit that kind of sales figure with their PS3 in two years worth of sales...

    In order to achieve the success Apple has had with the iPod, Microsoft needs a full line of MP3 players that offer alternatives and variety to a wide range of customers. Zune does not offer that, so it will not see the kind of success Apple has with the iPod.

    And hey, if you guys want to keep talking about the iPhone so much (seeing how nobody here likes it), think of it this way. It's just one more way Apple is expanding their iPod line to a broader range of customers.

  • Chris
    5 years ago
    Jan 18, 2007

    @nim55:

    I do agree that the 3/3 limit on "squirting" (hadn't heard the term before now) is extremely restrictive. It would limit Apple's success, so "roaring" may not be the best term.

    What would help would be the hit ratio of squirted songs that become purchased songs. If Microsoft could show a high ratio, they may be able to convince the record companies to open up a little.

  • Sam
    5 years ago
    Jan 18, 2007

    "If Apple implemented this for the iPod, it would be a roaring success. There's about 30 billion (exageration) iPod users in the world. This would give them a reason to upgrade."

    I agree with a lot of what you said, but I doubt that "squirting" (Microsoft's term - not mine!) would become that popular even if implemented on the iPod. In a world without DRM where users could freely send songs wirelessly to each other, then I think that it could be a big hit. But unless Apple can wrestle the music industry into accepting much, much less restrictive terms for wireless sending than on the Zune, then I don't see how this feature will ever catch on.

    By the way, the iPhone is going to have WiFi and Bluetooth, isn't it? So it has all of the basic hardware needed for iPhone-to-iPhone music sharing. We'll see what happens, but my guess is that unless Apple can get much less restrictive music sharing terms than the Zune, then they won't even bother to implement any sort of iPhone-to-iPhone wireless music file sharing/transfer.

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