Microsoft takes on the iPod

19 Oct

October 19, 2006

By Geoff Meeker

The launch of yet another mp3 digital music player is generally greeted with a wide yawn by entertainment techies.

After all, Apple has achieved total market dominance with its wildly successful iPod, having sold more than 60 million units sold worldwide.

However, when Microsoft announces that it is jumping into the fray, the industry does take notice. Microsoft has announced that its new digital player, Zune, will be available in time for Christmas.

The iPod is a tough act to follow and Microsoft will have to roll out something pretty special if they expect to erode Apple’s market share. And the advance word is that they have a pretty good little machine ready to roll out in December.

According to media reports, the Zune player is similar to the iPod in size and appearance. It will offer 30 gig’s of storage – enough for about 7,500 songs – and an FM receiver, something Apple has yet to accomplish. It will also be equipped for wireless transfer of music between players, something else the iPod can’t do. (However, songs transferred via wireless will be deleted after three days or three plays, likely for copyright protection reasons.)

Microsoft is also launching Zune Marketplace, a new online music store, to take on Apple’s incredibly successful iTunes, which has sold more than 1.5 billion songs since 2003 and has cornered 70 percent of the online music sales market.

Starting so late in the game, it’s tempting to write off Microsoft’s foray into digital music players and sales. However, Microsoft also came late to the video game market when it launched the Xbox in 2001, but used its deep pockets to invest in some heavy marketing and managed to win a respectable piece of market share. You can expect them to invest some major advertising and promotion in the Zune as well.

Would I rush out and buy the Zune, if I didn’t already have an iPod?

In the short term, no way. Longer term, I would need to think about it. First of all, Microsoft is notorious for rushing products to market before they are ready, apparently to meet self-imposed deadlines. Witness last year’s fiasco with the Xbox 360, which actually melted some game discs, and the gaps in security that have plagued certain software releases. If you have already decided that you must have the Zune, my advice is to at least wait until they have worked out the bugs.

I also have some concerns on the software side. Despite their market dominance in this area, Microsoft has been guilty on occasion of releasing some pretty clunky software.

What separates the iPod from the other mp3 players is the seamless integration of its iTunes software.  I don’t know if I’ve ever seen such a smoothly functional interface between computer, Internet, software and peripheral. The iTunes software is easy and intuitive to use, the music store is a click away, and downloading to iPod is as simple as connecting the cable. DO NOT assume that Microsoft will come out with something equally easy to use. The music management system on your computer and the way that it loads to your mp3 player is one of the more important aspects of owning such a device, so wait for the reviews before investing in the Zune.

However, the iPod is not without its flaws. Outside of not having an FM player, the unit has been criticized for poor battery life (my first iPod had this problem, but the second is much better). That said, if FM radio reception is not important to you, I suggest you stick with the tried and true iPod for now.

Despite its late entry into this market, I predict that Microsoft will spend its way to perhaps a 20 percent market share for the Zune.  But the iPod will continue as undisputed king of the domain for the foreseeable future.


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