Microsoft should exit the Zune business
Microsoft has built the world's largest software empire by doing many things right (and a few things wrong). It has managed to branch out into other markets like the game console business, but ultimately, it's a business software company. Always has been. Always will be.
It is therefore with some amusement that I read on ZDNet about Microsoft's corporate hand-wringing over whether to continue to develop and sell the Zune, and what that might look like.
Microsoft should not be in the Zune business. Period. No amount of Apple envy should have taken Microsoft into the Zune, and its best option is a quick exit.
Let's face it: Microsoft is not cool. That's reality. It's an enterprise software company and, however much one may dress up enterprise software, it's still not sexy or cool.
Billions of dollars in profit, however, is cool, and Microsoft has that in spades. Sure, it risks losing out on the digital-entertainment revolution by not having a music delivery platform, but there are other ways to get into that business without trying to beat Apple at its own game.
In the Zune, Microsoft is playing to Apple's strengths. In products like SharePoint and SQL Server, it plays to its own. Microsoft needs to find a way to get into the consumer market without drowning in Apple's wake. The Zune is not it.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
If the Zune features can make their way to cell phones, then that too would be profitable. The iPod is getting long in the tooth and no amount of reshaping the same plastic brick will make it any better than it already is. The Zune keeps evolving and offering new features. Some features that people want, some that are met with less enthusiasm. But they are evolving and progressing whereas the iPod has become stagnant and rather old by comparison. I don't count the Touch in this as I don't believe the Touch is really meant to be an iPod when it's really an UMPC / PDA instead.
In the end, if it is profitable, that means you're making money.
Making money is 'cool.'
I would have to disagree with about the iPod. You cannot discount the iPod Touch as "not an iPod". That is the same mistake Microsoft does when it says that the Xbox 360 is the winner of this generation of consoles (and, oh by the way, we don't count the Wii as a next generation console). The iPod Touch is an iPod. There is no way around it. Therefore, the evolution of the iPod is the iPod Touch. This is why Matt is suggesting Microsoft should get out of the business. They can't innovate in a cool way fast enough to counter Apple's moves.
I personally agree with him.
I agree with quadj, it sounds like *somebody* hasn't heard of the iPod Touch, hmm?
How's the air up there in Redmond, Dan?
Seriously though - Apple owns the PMP market, and nothing MSFT can do (short of a nuclear or bio-terrorist attack on the entire city of Cupertino, California) will change that anytime soon.
The iPod Touch is an evolution of the original iPod - one only needs to see the new Nano (and other models) to see how this is playing out... as these smaller models gain the features of the Touch, the Touch itself gains more features still, those features pass down to the smaller iPods, and so it goes.
The Zune isn't really evolving all that much. It is furiously trying to keep up, but aside from WiFi, has nothing compelling to make it stand out. Once you remove the form-factor as an equation (that is, include the iPod Touch), then the Zune falls flat.
Whether or not the Zune is profitable is another story. I sincerely doubt that it's very much of a profit if any at all, at least compared to the needs and money flows of a company the size of Microsoft. IOW, I sincerely doubt that there's enough cash to be had in the Zune to keep the company alive.
I agree with the other commenters. Calling the iPod Touch not another iPod is missing the point. Eventually, iPods will largely be of the Touch variety, and the "Classic" interface (as Apple calls it) will disappear. They'll still always need something for the smallest iPods that can't adequately be controlled with a finger, though, so that will be interesting. Clearly, however, it's in their best interest to support one major operating system for their phones/PDAs/iPods/whatever-you-want-to-call-them.
Call me a Windows or Microsoft fanboy if you must but note that I have offered no comment nor opinion on the Zune no iPod because I've used neither (IOW, you'll label me a Micro$oft fanboy just because I made fun of Apple fanboys). If you don't worship Apple then you must be the enemy. It's sad when you start making yourself loyal to a particular manufacturer or brand rather than just using what you like.
Oh and per the article I agree Microsoft should get out of the Zune business since Apple owns the consumer marketspace. For that matter they should stop targeting consumers with their OS and make room for the Linux Desktop! [cue angelic chorus]. Sorry I just had to bring some open source to this column that is clearly not related to "the business and politics of open source". Good reporting Matt!
My initial experience with an 8g Zune and the Zune marketplace was enlightening for myself as someone who did not expect much of the versatility of the Zune. Suffice to say I was surprised. I now enjoy the use of a Zune 120 and have discovered the ease of subscription synchronization of my music, videos, and numerous automatically updated audio and video podcasts. For all of the other Zune cynics out there give it a try.
That being said, I love the iPod Touch above all.
But where Zune tries to compete (HDD and smaller flash versions) I think it is better...love the subscription service over the single song purchase model too.
"Movie Broker 1.0 is an easy to use shareware application for your Pocket PC and Windows CE. Using this application can help you manage your media files in your Pocket PC. You can get desired tools and streams for your Pocket PC media files. You can also export or import your media files between your Pocket PC and your other appliances like Desktop, PDA and even Remote Media sources. Using this application you can copy and work on files of various types like documents, MPEG, WAV, MP3 etc. This application with self contained environment can make your media files available to you anywhere and anytime.
You can listen to your favorite music and audio files whenever you need or wish to. You can also open movie or video clips from this application. Thus this application can work as a perfect entertainer for you.
You need to have a network connection to get files from the remote source and then launch them."
Apple really does own the MP3 and portable video player market....so why another "me too" product? I love to see competition between companies--prices go down, quality and innovation go up; it's a win-win situation. However, why on earth make another "me too" product like the Zune? So, on this point I agree they should abandon the Zune.
On the other hand, if they're going to make the Zune, make it better than the iPod by giving us (the consumers) something we either lack in the iPod/iPhone, or something the Zune can do better than anyone else. FM Tuner? Give me a break.... give me something on par with Video Conferencing (w/ integrated cam) or make it interface with my Xbox 360 so I can use it as a rear-view mirror in Forza (like the PSP was supposed to do w/ the PS3). In other words, give me something so compelling that I can't wait to throw my iPod or iPhone to the wind....buy a Windows machine...and say it was all worth it.
Nope, nothing yet....
I think that the strength lies in its lawyers, or better yet, in Bill Gates' father lawyer DNA.
From the original "rip off" of software to become DOS, to the enforcement contracts to "only provide Microsoft products" on OEMs, to the contract with Apple to copy the Look and Feel...
Almost everything in Microsoft's business life is around a [not so clear] contract.
This is --IMO-- why it could not compete on consumers' devices.
And as the last "software practice" (an irony to legal malpractice)... Do you remember the Standard Voting fiasco?
Link please?
And at Matt Asay: of *course* Microsoft is cool! Why, that Allard dude shaved his head and legally changed his name to J. It's a one-letter name, man! Nothing is cooler than that. And he wears tight black jeans and t-shirts with ironic graphics. How much "cool" do you want? Microsoft is so cool, they're glacial.
No, it's cod logic. The person to make the claim in the first place has to provide the proof.
I now declare that you have a donkey's brain. I will provide no proof, it's entirely down to you to prove otherwise because we are now playing by your preferred rules.
Look at Apple, they are already trying this. They have iTunes on your computer, the iPod, and Apple TV. Microsoft has the most used desktop OS in the world, the second best selling game console, and Zune. How could they not be taking advantage of that? I rent HD movies on my Xbox 360 all the time and they look great. But I also still connect my iPod to my Xbox 360 to listen to music. Sometimes I will stream it with WMC but that is slow and doesn't always work very well playing in the background while gaming.
Microsoft is totally blowing it in, the Xbox 360 could be blowing the Apple TV away if they unify LIVE Market Place and Zune Market Place and let you transfer files around much easier.
If they want to wake up one day and spend so many millions on the T-Mobile sidekick. Good, go ahead Microsoft 'cause I got rid of my Sidekick the month after the deal went through. I'll get an iPhone or Gphone or Blackberry instead.
If they want to spend soo many billions to acquire Yahoo! Go ahead Microsoft, 'cause I've already transitioned most of my stuff to Google and I can shut down my Yahoo accounts and discontinue the rest of my Yahoo usage at will. You wont see me on Live either.
If Microsoft wants to spend millions on making Verizon search hit them, go ahead because I can still goto the competition. I say let Microsoft spend, spend, spend because at the end if Microsoft actually makes a solid operating system like XP most people don't see a need to simply continue buying new ones every 2-3 years just because. Microsoft can force companies to buy their future O/Ses by contract but that's those company's problems not mine the smart ones will migrate now to save themselves the "Microsoft tax" on their business... I say let Microsoft blow their money.
Sincerely,
Earl "burned by MS one too many times" Benzar
The reason why Apple has made any gain in computer marketshare (7-9%) is because of the underperformance of Vista, not the underperformance of the Zune. A dollar invested in Windows is worth $100 invested in the Zune. Microsoft once said to Apple, its time to "knife the baby" (a reference to QuickTime, which, ironically is a distant ancestor of Apples music/media strategy that lead to the iPod). I doubt Apple gives a damn abut the Zune.
Apple dominates the market with iTunes.... everyone knows that.... but part of that is because people only know "itunes" and don't really know about Zune, or think "Oh it's Microsoft... it cant compete with Apple in something like this".... i mean Hell, Apple revolutionized the Digital Media revolution with iTunes.
But everytime i tell a friend about zune and actually get them to try it out, they all love it. The interface is amazing, the unlimited downloads for a flat rate can't be beat, and the player itself is great.
More people need to try a Zune... or at least the Zune 3.0 software. I think alot of people would be impressed. I really do love mine and would hate to see the service go. Hopefully that wont happen.
Well, let's see, I have an iRiver H10 with an upgraded HDD and RockBox installed (for gapless playback and oggs) and I used to have a little Palm... something or other with a folding keyboard that clipped in the bottom and doubled as the stand in about 2003.
I'll get me coat.
- by grabulous January 13, 2009 2:20 PM PST
- D'ja ever notice that when you put iTunes on a WinXP netbook, it becomes a video iPod?
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