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Summary:

As expected, the next gen of Zune was announced tonight: three new players timed to hit stores in mid-November: two flash models — 4GB ($14…

The New Zune FamilyAs expected, the next gen of Zune was announced tonight: three new players timed to hit stores in mid-November: two flash models — 4GB ($149) and 8GB ($199) – and an 80GB ($249) hard-drive model. The current 30GB model launched at $249 list.

Chief among the new or enhanced features: wireless syncing via WiFi from PC to Zune, more expansive wireless music sharing, and — perhaps the most important from our perspective — automatic import of TV shows recorded to the Microsoft (NSDQ: MSFT) Windows Media Center baked into most editions of Vista. Still no video sales in Zune Marketplace but the company is adding 1 million DRM-free songs to the market place. Not clear at this point: how much of this will be available to current Zune users through firmware or software updates. (Note: For first-gen owners like me, AP says first-gen models will get a software update this fall; amount of added functionality still unclear.)

Reuters: J Allard, the Microsoft corporate VP responsible for Zune, addressed the market share issue (sort of): “”The market share thing is the easy thing to discuss and write about, but it’s such a bad measure. Talk to me in six or seven years about market share. Talk to me this year about the experience we are creating.” The company is still talking about a 3-4 year window for Zune to gain scale and isn’t expecting a short-term profit.

Also in an interview , Allard explained why Zune is steering away from wireless songbuying for now — in part, to get around spotty WiFi — but said “we

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  1. I compared Apple's design, packaging and introduction of the iPhone and Microsoft's for Zune 2, also highlighting Ballmer's disastrous record in consumer markets here at counternotions.com:

    "Zune 2: Mediocrity grows on trees"
    http://counternotions.com/2007/10/03/zune-2-mediocrity-grows-on-trees/

  2. I explored the difficulties MS will have with its ongoing Zune strategy (with links, videos and background) at:

    "In the shadow of the iPod: Microsoft Zuning out of the Social"
    http://counternotions.com/2007/11/06/zune-no-longer-social/

    "…Zune has no compelling advantage over the iPod, other than being not-the-iPod. With the possible exception of Sony (that apparently cannot write software if its life depended on it), there’s really no other company better positioned to challenge Apple’s digital music hegemony than Microsoft. But is Microsoft being delusional here or is Zune 2 just a bridge to Zune 3 that’ll crush the iPod?"

    "So what does Microsoft do for Zune 2? Double the ad budget ($17 million for the next six months), change the ad agency (McCann-Erickson’s new T.A.G. unit in San Francisco) and drop the “Welcome to the Social” strategy."

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