I'd like to say, unsarcastically, "HOORAY FOR MICROSOFT!"

I used to be a fan of Creative's harddrive-based players. I've owned an ORIGINAL 6GB Nomad Jukebox, a 20GB Nomad Jukebox 3 (which I still have), and a 20GB Creative Portable Media Center (also still have). Because of their total lack of any concrete music store with a viable subscription service (and Napster's catalog sucks!), I'm looking at scrapping both and going with a Zune.

Now all you iPod fans are gonna say "WTF! 9% of the hard drive market is hardly worth the mention". And yet, when Apple-lovers talk about Apple's computer marketshare always increasing, since Mac OSX has been released it has yet to even reach half of that market percentage. So, good on ya, Microsoft.

hello

To be fair, NPD isn't exactly objective.

Microsoft's Xbox 360 US sales-NPD story withdrawn

,----[ Quote ]
| The Los Angeles story headlined "Microsoft's Xbox 360 US sales
| top first Xbox--NPD" is withdrawn because the data supporting the
|
| story may be inaccurate. Reuters is waiting for an update from the
| company. A new story may be issued.
`----

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061208:MTFH45656_2006-12-08_01-12-52_N07221320&type=comktNews&rpc=44

It's part of the biased studies/analysts fiasco.

http://www.theregister.co.uk/2006/12/15/nytimes_ms_ban/

Some thoughts... before the Joe Wilcox haters turn on their flame throwers: [grin]

1) THE LOSERS
Joe states in the article that the losers in these numbers are basically a little bit "Apple iPod" & a lot "Creative Zen & PlaysForSure". Not only is this right, it's an early demonstration that the old partnership model wasn't working. Creative couldn't market their way out of a paper bag. Joe recently has been criticizing Microsoft for not being enough of a partner, or at least that was a theme of his in his final blog entries with Jupiter. This is early confirmation that partnership is certain areas is a recipe for failure in certain areas where the "ecosystem" model has to be built top-down, not bottom-up.

2) I DON'T HEAR NO FAT LADY
I've heard more than my share of comments that the Zune is dead. I also recall people saying that early on about AOL vs MSN, IE 1.0 vs Netscape, Xbox 360 in Japan, and RISC vs CISC. Has anyone forgotten that the Zune is basically just a hard drive with a 400mhz CPU, & an easy-to-use WiFi Adapter connected to it? Think of the possibilities! With that in mind, Zune has probably a dozen or so gears left to go before it's hit full stride in this market. What gears, pray tell? Well here's a few things to chew on:

- OPEN NETWORKING: It should be obvious that exchanging ANY FILE between Zunes is possible; it's just intentionally crippled right now so that Microsoft could get the music industry to ride along. If I told you that my $225 Zune could copy any file I have to any other Zune in the perimeter without restriction, you'd probably involuntarily say, "Whoa... Cool." And I'm not even saying Microsoft would be the ones to do this: Zune uses a derivative of Windows CE, making it very configurable by external forces.

- DJ MODE: Zune was originally billed has potentially having a DJ mode, which allowed you to broadcast over a multicast subnet, sharing the music you're currently playing with anyone in the vicinity like an independent radio station. This was reportedly cut for the initial release but is just a firmware update away.

- WIFI PC INTEGRATION: Anyone noticed that the Zune doesn't wirelessly sync with Windows, or transmit files to the Windows PC hard drive, or wirelessly broadcast music to the PC's speakers? This is for all intents and purposes, just a firmware upgrade away.

- ONLINE MUSIC PURCHASES: How about buying music directly from the device? Completely possible but not emphasized for this release. Keep in mind that this is all just software and requires no hardware changes to the device.

- DIRECT-TO-XBOX360: Zune was also billed as having network sharing with Xbox 360 consoles, effectively serving music & video directly over WiFi to a home entertainment system just by entering the room. This was later downplayed to "delivering content through the Zune Desktop software" through a Windows Media Connect like interface, but frankly, WM Connect is so lightweight that the original functionality planned (direct-from-Zune playback on XBox 360) is effectively just a firmware upgrade away for the Zune player itself.

- NETWORKED GAMES: It's already known that several games are created & ready for the Zune. Think about the Zune's big screen and multidirectional controller. Now think about the WiFi adapter & multiplayer - even MMO game play.

- BLUETOOTH: The rumored stereo profile Bluetooth never materialized in the first shipping device - likely because of the need to retrofit the Gigabeat hardware. Don't think that it won't make the next version though.

- BETTER FORM FACTORS, SAME NETWORKING: The current Zune is essentially a Toshiba Gigabeat to get the device out the door, with other designs being independently created in parallel. With Microsoft hiring design firms like those that designed the Xbox 360's shape, imagine an entire family of devices appealing to different ages and needs... all using the same Zune WiFi interfaces & communications protocols.

- PHONE: Now imagine having a device that leverages the experience & relationships that Microsoft's mobility group has with the Zune team.

- VERSION 2.0 & 3.0: Who in their right mind believes Microsoft has ever gotten things perfect in v1.0? Did anyone forget that we're talking about Microsoft: A company with pockets so deep that they appear to have outlasted Sony in the investment & diligence departments with regard to the console war? A company with such a large war chest that they can keep competing & innovating until they gain a strategic advantage through one or more of their hallmarks: Integration, volume pricing, or their competitor's propensity to screw up big time just once, giving them enough room to pass them in the market. (See Netscape, WordPerfect, Lotus 123, Novell, Real Networks, Java, Macintosh, and any of the other companies that have been outgunned by Microsoft's business acumen.)

3) IT'S A BIG MARKET: People in NY & CA have the idea that Apple's iPod is everywhere and I disagree. This is a growing industry & most people don't yet own media players in the same way that they did Walkmen in the 80's. The game's still very wide open and I think that this race is a marathon, not a sprint.

Philosopher William James said that the art of being wise is the art of knowing what to overlook. I think the bumps in the road for Zune in its first release is something to carefully consider overlooking because I believe the network adapter that Zune has (and the patent for said configuration) is a technology marriage on the level of the Nintendo Wii's Wiimote Gyroscopic Controller. It's that revolutionary an idea.

It just needs some version 3.0 work on it.

M$' biggest Zune's blunder was not strong arming the content owners to allow for them to provide a PlaysForSure bridge to Zune's DRM. Their next biggest blunder is what appears to be a lack of marketing. iPod commercials are plastered all over the air waves. I watch very little TV, but what I do watch usually ensures I'll see at least one iPod ad. You can't sell a device that lots of people don't know about. In fact I've recently started asking people I'm randomly standing in line with as I shop for Christmas, and I'd say only 50% of the under 25 crowd has heard of Zune. Add 10-15 years to that demographic and the % would probably drop to below 10%. Maybe when Vista releases M$ will roll out TV ads that market the Zune as being somewhat complimentary to Vista? Personally, I think there's lots of disenfranchised iPod owners who'd love to go different direction, mainly assuming they haven't amassed any appreciable iTunes catalog.

Y'know, I initially agreed with you that not having PlaysForSure relationship would hurt Zune. Customers not being able to leverage their existing relationships with Window Media-based DRM vendors seems like a big ding on the whole Zune thing until I realized that I was making the assumption that the marginal sub-20% or whatever marketshare that PlaysForSure has, even though these folks already own devices, would suddenly up and "switch over" and that this was the market is what Zune's depending on for establishing itself.

But it's just not the case: Zune's clearly targeted at new owners, period. They're looking at folks that want a choice other than iPod that customers feel will be well-supported by a monsterous corporation like Microsoft that brand-aligns with technologies those same customers already own, like Windows. And as well they should: The Media Player market is wide open and continuing to grow at a sick pace. The bottom line is that Microsoft wants to maintain control of the experience for their media player from marketplace to desktop software to device.

And let's not kid ourselves: NPD's shown that no one ever really bought a massive quantity of media from "MSN Music" that they couldn't burn to disc if they haven't already. Those few exceptions that did? Do you think they'll really move to Zune? Not likely.

Marketingwise, I go back to this race being a marathon & not a sprint. Let's say you were a big company that had, frankly, a v1.0 mediocre product that had a lot of potential wrapped around a patent for networked portable media devices but had only scratched the surface of what was possible. I don't think any company would put forward a full court press on advertising until they were more established in their potential. The announcement of the release was as much a splash for adoption as they wanted: Controlled publicity for certain new products is often better than advertising blitzes that work for successful, established products. They'll ramp up the hype as the firmware gets better and new features are rolled out.

Then why release a product at all? Why not just wait until the product "was fully ready"? Oh c'mon. No one's that naive. Microsoft never does that with products that can & will evolve between revisions. Initial v1.0 products that can grow in feature sets with software revisions are almost always weak initially. The Zune is a combination of desktop software, firmware, & services, all of which are v1.0 but also can change and evolve. Microsoft uses early adopters & influential enthusiasts as voluntary testers as products have innovations incorporated into them. Look at OneNote or Sharepoint: Both were mediocre v1.0 products that got dramatically better in their subsequent revisions.

I also think people make too much of established iTunes customers in the same way that they make too much of established PlaysForSure customer libraries: I don't think the number of people that have "really large" libraries of iTunes music is statistically significant to the market that Zune is trying to capture, and even for those that do, I don't think those people would consider moving to Zune anyway if they were willing to sink that much money into an Apple investment.

I think it's quite an obvious fact, that if the Plays-For-Sure system was really as successful as the iTunes Music Store, Microsoft wouldn't have likely decided to build their own closed Zune ecosystem.

Of course, whether or not they would've even made the Zune in the first place is another "what if...?" altogether.

I think that subscription users will find that it's a very easy switch since they only have to buy a Zune, cancel their account with their previous service, and buy a new Zune Pass. I can only bet that this will offer satellite radio customers a less-expensive option with more choice too.

Roy Schestowitz wrote: "To be fair, NPD isn't exactly objective."

I sought out the NPD numbers. The firm didn't release a study commissioned by Microsoft or any other vendors. NPD makes these numbers available on an ongoing basis.

As for biased analysts, the situation erupted over an analyst quoted in the New York Times. He works for himself, which raised questions about the impact of clients on what he says. I don't suspect any problem, but for the Times perception was enough; that's good journalism at work. By the way, if you survey my Microsoft Watch posts, you'll find that I intentionally note client affiliation for single analyst shops.

NPD is a large analyst firm with many, many clients. If it shows favoritism to one over others, more trouble is likely to come from clients than from the news media.

With regards to accuracy, I don't doubt the veracity of the NPD numbers in their context: retail store sales. Last I checked, NPD doesn't record online sales. Given that more than 40 percent of Apple sales are direct online (let alone impact of other online vendors like Amazon), NPD's numbers reveal only part of what's going on. But an important part, nevertheless.

Happy Holidays,

Joe

I'd like to pipe in and say that la_bruin's comments are worth a second or third read.

Happy Holidays,

Joe

Wow, Apple is Crap - MS Zune is the same - I will keep my Archos 604 WiFi edition blows them all away!!!