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March 10, 2010 4:36 PM PST

Windows Phone 7 won't kill Zune HD

by Matt Rosoff

The Zune HD is a strong music player. It's got a lot of features I wish Apple would add to its iPod and iPhone lineup, particularly wireless sync and queuing. But with the impending release of the Windows Phone 7 Series, which will include full Zune HD functionality in its "Music + Video" hub, I've begun to wonder if Microsoft will phase out the Zune as a standalone music player.

The Music + Video hub in the forthcoming Windows Phone 7 Series interface.

(Credit: Microsoft)

Here's one clue: Microsoft developer Michael Klucher on Tuesday put up a blog post about the upcoming XNA Game Studio 4.0. Thus far, XNA Game Studio has been primarily used to develop casual games for the Xbox 360 and, more recently, to create games for the Zune HD. (Elements of the XNA platform are used by big game studios to develop other Xbox games as well, but those developers use a separate Xbox Development Kit available only to licensees.) Long story short, Klucher confirmed that XNA Game Studio 4.0 will support game development on Windows Phone 7 Series phones, but not on the Zune HD. In his words:

Development for the Zune and Zune HD will continue to exist in XNA Game Studio 3.1, however, in XNA Game Studio 4.0, we're encouraging you to migrate your games over to the Windows Phone 7 Series platform.

The code words "encouraging you to migrate" are often Microsoft-ese for "don't say we didn't warn you." Could this mean curtains for the Zune HD?

I talked with Michael Yaeger of the Zune team, and while he emphasized that Windows Phone 7 Series will indeed include the equivalent of a Zune HD in every phone, he also said that Microsoft is "all systems go" on Zune HD production in the U.S. The company still plans to release a Zune HD firmware update this spring with some interesting new features, including Smart DJ and new video codec support. The game development story might change a bit--Microsoft won't encourage amateur developers to make games for the Zune HD, but it might port (or allow developers to port) some popular Windows Phone 7 games back to the Zune HD.

As Yaeger put it, Microsoft views the Zune as a "long tail" product, for the subset of people who want a portable entertainment device separate from their phone. This sounds odd coming from a company that considers new products uninteresting until they earn $1 billion in annual revenue, but I'll take him at his word.

So will Microsoft take the Zune HD worldwide? Here, Yaeger said Microsoft is still mulling it over, which suggests probably not--at least not before the new Windows phones launch. And I'd be very surprised if there's a next-generation Zune HD, although Microsoft could always take a version of Windows Phone 7 Series, strip out the 3G antenna, and sell it under the Zune brand--sort of like Apple does with the iPod Touch.

Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff.
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by thrust2night March 10, 2010 5:09 PM PST
Looks like this is a good time for the Zune HD to evolve into a mobile gaming platform.
Reply to this comment 4 people like this comment
by monkeyfun14 March 10, 2010 5:14 PM PST
Or atleast an alternative for people who don't want an expensive data plan.
5 people like this comment
by Random_Walk March 11, 2010 8:10 AM PST
Bah - the Germans have just come out with a new phone that stomps both WinMo 7 and even the iPhone into dust:

http://www.youtube.com/watch?v=udlxr8t1nZM
by expatincebu March 10, 2010 5:37 PM PST
How can you kill a device that was stillborn? Wait another five years when the ZunePad is released, way late and not nearly as good as an iPad. All the fan boys will crown it a killer and spend countless hours blogging about how crackalackin it is. Maybe it will out sell the Zune, after all, a few hundred sales will accomplish that! LOL.
Reply to this comment 5 people like this comment
by monkeyfun14 March 10, 2010 5:48 PM PST
If the Zune is a flop why come on here and try to justify it.
13 people like this comment
by thrust2night March 10, 2010 7:16 PM PST
@ monkeyfun14

He forgot to change his iPad and is cranky.
11 people like this comment
by Morpheus Phreak March 10, 2010 9:12 PM PST
Aww, how cute, you think you're actually being clever don't you expatincebu?

It's too bad for you that Zune before the launch of the HD had already managed to sell a combined total of nearly 4 million units.

The HD has been selling faster than previous models.

The HD also took 2nd place for the Engadget Portable Media Device of the Year, crushing the 3rd place device by almost 27%. It lost by exactly 10% of the votes to the iPod Touch 3G.


Don't let these facts stand in your way though.
4 people like this comment
by kelmon March 11, 2010 3:32 AM PST
@Morpheus Phreak

"The HD also took 2nd place for the Engadget Portable Media Device of the Year, crushing the 3rd place device by almost 27%. It lost by exactly 10% of the votes to the iPod Touch 3G."

The problem with that is that it doesn't reflect reality much. When you consider that the iPod has sold 250 million units globally you can see that when it comes to the PMP market that Microsoft couldn't organise a ****-up in a brewery. For example, why are they utterly incapable of releasing the device globally? Why does it now sound as though their latest and greatest device is going to be killed off in favour of a new platform just a year after its release? From a developers perspective, why would you invest in either the Zune HD platform or the upcoming Windows Phone 7 Series if Microsoft may change direction again?

It's possible that Microsoft might get things right eventually but they are taking a very long time to do so and it is often painful to watch.
2 people like this comment
by Renegade Knight March 11, 2010 12:06 PM PST
@ kelmon

Getting it right and selling a lot of something are two different concepts. My touch is the biggest PITA of any mp3 player I've owned, but boy do they sell a lot of them.
1 person likes this comment
by TinyIoda March 10, 2010 6:21 PM PST
i dont get it... why not just create the proper apis for the zune hd as well... its got the right hardware (minus the new buttons)

i suppose it doesnt really matter... i dont really use my zhd for the games as is
Reply to this comment
by Yelonde March 10, 2010 7:12 PM PST
The iPhone didn't kill the iPod touch. I would not expect winmo7 to kill the zune HD.
Reply to this comment 1 person likes this comment
by IT_worker March 10, 2010 8:06 PM PST
iPhone didn't kill the iPod touch, because they run the same operating system.

Windows Phone 7 Series will kill the Zune HD, because they are different operating systems. We already know that Microsoft is planning to release the Zune HD2, which will run the Windows Phone 7 Series OS.

The result is Zune HD is a dead duck, and all the games that run on it will be destined for the trash heap. Zune HD2, based on WP7S, will be Microsoft's 4th attempt at a music platform. People must be starting to get the message that Microsoft's portable devices have a pretty high failure rate.
6 people like this comment
by Morpheus Phreak March 10, 2010 9:14 PM PST
Oh really now IT_worker

Here's a fun quest for you. Show any sort of reputable source for even a single piece of rumor mongering you just spit out.

Oh, this should be fun
2 people like this comment
by slayr007 March 10, 2010 9:41 PM PST
Sry to make you look like an idiot, but WP7S will actually create a better zune hd. The Zune HD is dead, but its succesor will be ten times better. WP7S will be the core OS for the device, instead of being directly built on top of CE6. This creates a iPhone/(I know this is incorrect way to say it, but I don't care)iTouch type of relationship. This means access to the WP7S Application Marketplace, IEM7, possibly Facebook integration, and an eMail client. God I can't wait to see the actual device. I hope they keep the same basic dimensions. I'd hate it if they changed it.
by Random_Walk March 11, 2010 8:29 AM PST
Actually, this is drop-easy; just compare the number of Zune units sold in 2009 vs. the number of iPods sold in 2009.

Or, to make it charitable, compare the number of iPod Touches vs. the number of Zune HD's sold over the last quarter of 2009 (or this quarter when it's done, or...)
by rapier1 March 11, 2010 10:03 AM PST
Why is it when people talk about the Zune versus the iPod the fans always roll out sales figures but, when they talk about OS X versus Windows sales figures don't matter anymore? If people are sheep for buying windows why aren't they sheep for buying a iPod?
4 people like this comment
by Renegade Knight March 11, 2010 12:08 PM PST
@IT_worker

Nice bit of non logic. I have a touch because I wanted an iPod and didn't want and iPhone. If I decide I want a Zune and not a Zune Phone aka WinMo 7 because (my Droid works fine, I'll l get a zune.

The mp3 player I can leave in my car and not care, even if it's stolen. There is a place in the world for stand alone mp3 players.
by Renegade Knight March 11, 2010 12:11 PM PST
@ rapier1

Nice. I didn't think about that. Now that you mention it though, I think Apples marketing strategy is all about targeting Smart folks who aren't sheep in most things but are tech sheep or even power users who want to be sheep in some things because they have to spend all their effort doing the non sheep stuff for work. Naturally generalizations are just that. There are always exceptions.
by Random_Walk March 11, 2010 4:59 PM PST
He was asking about cites concerning sales - I answered.

As for OSX vs. Windows, (or any two entities), all you need to is compare marketshare trends - who is growing, and who is shrinking. Look at it long term (to remove anomalies), and there is where you can tell the winners from the losers.
by EminiSP March 11, 2010 10:15 PM PST
@ random walk

So at the end of the day Windows is the winner and OSX is the loser. Marketshare trends are just that "trends". They go up, down, and all around until the the company closes the door. At the end of the day (in marketshare) Windows is still on top. Look at the numbers.

Women lie men lie numbers dont
-Jay Z
by Random_Walk March 12, 2010 6:14 AM PST
"Marketshare trends are just that "trends". They go up, down, and all around until the the company closes the door."

This is why I specified long-term trends. ;)

Let me put it this way... it took roughly 3 hours for RMS Titanic to sink - a veritable record as far as such incidents go. Short-term, most of the ship was above water (in your estimation, "winning"). It wasn't until the last hour when it became obvious, even to the slowest dullard, that maybe it would be a really good time to find a lifeboat...
by Synthmeister March 10, 2010 7:17 PM PST
This leads me to believe that the Zune and WinMo 7 don't really have the same core OS which is a very serious strategic disadvantage. If they did have the same OS, pooping out a "phoneless" Zune would require almost zero risk and investment beyond what MS is already risking with WinMo 7 phones. I just don't understand why they would go this route.

Apple is now selling almost as many iPod touches as it sells iPhones, effectively doubling the potential market for it's mobile OS platform. Since Apple is projected to sell 35 million iPhones in 2010, that is a very big deal. They are able to capture the hearts and wallets of millions of people who don't care for AT&T or don't care to pay an extra $35 per month for a data plan or who are too young to have an iPhone. In many ways, it allows people like me, to buy into the iPhone ecosystem even though I'm locked into Verizon and greatly mitigates the iPhone being limited to one carrier in the USA.
Reply to this comment 4 people like this comment
by slayr007 March 10, 2010 9:35 PM PST
They do have the same **core** os, they just don't run the same os. It makes a lot more sense if I put it to you this way, Zune HDOS and WP7S are both built on top of Windows CE6, but they have different, well, layers put on top of them to differentiate themselves from one another. This is troublesome, though. It means that Microsoft has to build a new, totally different layer everytime they create a new form factor of device. Case in point, the Courier, It also runs Windows CE6, however, it uses a different layer than both WP7S and Zune HDOS. The basic Idea is similar to WebKit, it gives the devs a basis on which to develop the entire OS, so that they are already designing the GUI, instead of starting of with the base unix that makes every modern day computer work.
by kelmon March 11, 2010 3:36 AM PST
@slayr007

Sounds a lot like the Mac OS to me - both the Mac and iPhone/iPod Touch/iPad essentially use the same base OS but the interface layers are different, plus or minus the odd API.
by Synthmeister March 12, 2010 8:23 AM PST
But can developers use the same SDK for all of the devices you mentioned? That is one the keys to Apple's success, especially as the core OS is even the same as OS X. The foundational tools were already in place, which is why Apple was able to deliver a world class SDK so quickly for the iPhone. Developers can use the same SDK for the iPhone, iPod touch and now the iPad. And all three are based on a pervasive touch UI and have been from the very beginning. Contrast that with WinCE, which has gone off on many UI directions with buttons, stylus, two screens (Courier) and touch.
1 person likes this comment
by Dan7637 March 10, 2010 7:32 PM PST
this is the same thing apple did- iphone & ipod touch
Reply to this comment
by TEHKI March 10, 2010 7:58 PM PST
you cant kill what is already dead
Reply to this comment 3 people like this comment
by krosafcheg March 10, 2010 9:04 PM PST
The Zune HD is currently number 9 on Amazon for mp3 players, and has been climbing. Obviously, most of 1-8 are iPods, but I don't think anyone was expecting Zune to outsell iPod even in just a few years.
2 people like this comment
by Random_Walk March 11, 2010 8:40 AM PST
Really? Let's look at the different (relevant) lists, then.

At time of posting (see post time above), we have...

http://www.amazon.com/gp/bestsellers/electronics
(all electronics)
#1 is the Kindle (well, gee, go figure), while #2, #3 and #9 are iPod Touches (of various sizes) The first ZuneHD device shows up at #56

http://www.amazon.com/gp/bestsellers/electronics/172623/ref=pd_ts_e_nav
(portable audio and video)
#1, #3, and #9 are iPod Touches (of various sizes).The first Zune HD device shows up at #36.

http://www.amazon.com/gp/bestsellers/electronics/172630/ref=pd_ts_e_nav
(mp3 players and accessories)
#1, #3, and #8 are (you guessed it) - iPod Touches. The Zune HD crawls up to #33 in this list.

Now note that these lists update hourly (something else you neglected to mention)... so anomalies can pop up at any time, unless you can point to something a bit more long-term.
3 people like this comment
by EminiSP March 11, 2010 10:20 PM PST
@ random walk

What you fail to realize is the zune hd rose from oblivion to your numbers you show in your comment. I say thats pretty impressive. You and anyone else mentioning zune hd and the ipods/itouchs in the same statement just shows the zune hd is making headway in the mp3 market.
by Random_Walk March 12, 2010 6:16 AM PST
They all "rose from oblivion" to those numbers... your point?

Fact is, in spite of the massive marketing, in spite of the fact that the largest software company on the planet was pushing the thing, it can't seem to attract the kind of attention that it needs to.

BTW - I neglected to mention that in the mp3 player category, the zune was getting stomped on by a number of relative no-name brands with similar capabilities.
1 person likes this comment
by wixostrix March 14, 2010 3:22 AM PDT
@Random_Walk

"Fact is, in spite of the massive marketing, in spite of the fact that the largest software company on the planet was pushing the thing, it can't seem to attract the kind of attention that it needs to."

What massive marketing? You rarely see ads for Zune. Zune/Zune HD are probably as popular as Microsoft want them to be. Microsoft knows how to market. They probably used the Zune HD as a preview as to what was to come. By making it US only it gives them time to develop their content and services for a global launch. They could have easily made the decision to keep the app store closed because they didn't want people developing apps that applied for the ZHD only. So why fill up the app store with hundreds+ apps that will have to be rewritten to work with the WP7 devices...?
by monkeyfun14 March 14, 2010 1:19 PM PDT
@Random_Walk

Notice he said mp3 players not GPS units, ereaders, cameras, USB drives, mice, webcams etc. Way to destroy your own point mate.
by Doug_deJ March 11, 2010 7:08 AM PST
With any luck, that upcoming firmware update will change the software on the Zune HD to be "Windows Phone 7 Series platform", much like the iPod Touch runs the iPhone software *platform*. And then all will be well.

There is no chance that I will buy a *phone* based on this tech, but if they go that route, I could certainly see myself finally buying a Zune HD (or some other PDA-like or slate-like device that runs the same software but doesn't have a phone in it).
Reply to this comment
by dinkeldorf March 11, 2010 7:25 AM PST
Two strikes on MS here.
1) you have to port apps from one to the other
2) the tming. They just killed Zune HD sales.

MS just needs to bring out its own MS phone on WM7. No ifs or buts.
Reply to this comment
by rapier1 March 11, 2010 10:06 AM PST
I don't think Zune HD sales are seen as critical to Microsoft. I'e always felt that the Zune was a strategic move on the part of MS. It gave them a really good test bed and a place to try out different ideas in the marketplace. The various iterations have improved dramatically and I think it's going to culminate in the WinPho7 rollout. That it didn't shoot to number 1 is probably slightly disappointing but not unexpected to the strategic management team at MS.
by -fjtorres- March 11, 2010 7:26 AM PST
Hmm, nobody seems to be considering an entirely different possibility:
MS not putting XNA 4 on ZuneHD because XNA4 is going into a *different* gaming+media portable device, one not carrying the Zune brand on the hardware.
Maybe the follow-up to ZuneHD is a pocketable XBOX?
Maybe Zune is to be the brand for the Service (as its deployed on XBOX 360 and WinMo7) and the hardware will carry the (already worldwide-deployed) XBOX brand.
Instead of building up the Zune brand, they just move the non-phone PMP/Gaming box under the already existing brand.
More sensible, no?
(Shrug)
We'll see...
Reply to this comment
by Notafanboi March 11, 2010 10:15 AM PST
Zune hardware is dead. HD is the end of the line. But most knew that before it shipped.
Reply to this comment 3 people like this comment
by RicardoDawkins March 11, 2010 4:43 PM PST
Windows Phone 7 killed Zune HD and it was Microsoft's idea.
Reply to this comment
by mexter2010 March 13, 2010 9:21 PM PST
I really don't see a future for Zune, not with the way Microsoft is handling it. It's a good device, but the company has made it abundantly clear that it doesn't care to support it the way that it used to (pre HD). I had a Zune80, and it was nice. Compared to the iPods of the day, it was far more elegant and functional.

The ZuneHD was a wasted opportunity. It should have been good, but rather than compete feature for feature with the iPod Touch, it narrowed its focus to media. Yes, it's a PMP. But it's priced nearly identically to the iPod Touch, looks similar, functions similar. It should have similar functionality, but it does not. It's one unique feature (out of the box without expensive add-ons) is the HD Radio, which was admittedly rather nice. But not enough to justify the cost unless you were specifically looking for a portable HD radio. The've dropped the ball on apps, the user interface can't be used without looking at it, there are ads on it, etc.

Put another way, I had one for five days, and gave it a good shot. But it was ultimately inferior to the Zune80 that preceded it and difficult to use. I returned it.
Reply to this comment 1 person likes this comment
by randy620 March 15, 2010 12:07 AM PDT
the comment "there are ads on it" make me question if you even have one. There are no ads on the HD except for a few apps. The more importan ones like Facebook and Twitter don't have ads and the ads last about 2 or 3 seconds on those FREE apps.
by livewireinc March 21, 2010 12:34 AM PDT
when was the zune ever better looking then an ipod? The zune was fat bulky and clunky and heavier then the ipod. It was like ipod 1. The 2nd round of zunes were a little better but still nothing compared to the ipods or even the sandisks and others.

As far as market share OS X has a lot bigger marketshare then people give it credit. Every ipod touch and iphone run a stripped down varient of OS X. Then if you take away the enterprise market which apple is not really in and put desktop to desktop win vs os x you get a much smaller gap.

OS X is gaining ground. Macs have had the highest sales record ever and it just keeps going up and up and up. MS would not be where they are if they gave people a choice.
IMagine every computer came with no OS installed except for a mac. If you bought dell, tosh, sony ext you bought a computer. Then when buying it you had to choose the OS. OS X, Linux, Windows were your choices. I can guarantee you MS would have nowhere near the marketshare they do.

I use to install for dell and i can tell you that many of the peoples computers we installed when we would ask why dell or why windows why not mac or linux and most said that dell was the cheapest. Most people did not know what they were getting. To them there was no difference between mac, dell, sony ext. IT was just ok we have all these to chose from Dell is the cheapest or Dell offered free install or something so they chose dell.

Sure some people dont like using a mac. Not sure why but ok. The fact is i know so many people who use windows simply because of 2 reasons. They had an old version of windows and were worried about having to learn something new. Although with Win 7 that changed some. I know windows people who said no we dont want a mac we would have to learn computers all over. Then they buy win 7 computer and they are confused as to how to use it because it does not work and act the same as their win xp or win 2000 did.
the other reason is people just assume Macs are windows machines that look nicer. I have heard it. And they assume we will just get the cheapest computer we can. So they go looking and if thats dell if thats some no name off brand thats what they get. NO matter if it doesnt work in 6 months.

I have heard people say oh using a Mac costs more because they look at the price tag of the more expensive iMac and then look at a cheapo dell or some off brand and say this desktop is $300 or $400 this imac is $1100.
I have never found any windows computer over the course of 1 year to be cheaper then a mac. BUt anyway The point is OS X has a growing marketshare and with the iPad coming using OS X, the iphone and ipod touch all using OS X its much bigger then most give credit.
I believe people buy ipods because they like the way they look and with the touch they like the use of all the aps available and games and just so much more. The nano and Classic are great too and so is the shuffle.
Windows people if given the oppurtunity to have to choose and not just have windows because it comes installed on whatever computer they buy would choose something else.

in the end i have to give Apple credit for where they have come. 10 years ago People thought Apple might not survive another 10 years. IN 10 years apple has turned itself around and become a powerhouse company with billions in the bank. MS has gone the otherway. Failure after failure. The original zune and 2nd gen zunes did not sell well. MS pissed off allot of people when it abandoned its plays for sure. Vista was a utter failure and the zune hD has not sold anywhere near thier expectations.
Windows mobile has gone from a major player to being upset by Apple and Google. MS has spent millions upon millions in advertising and they have not shown any increase in sales from it and infact when surveyd most people did not understand the commercials or did not like them.

MS is not the same company they were 10 years ago niether is Apple and the world is different. What MS has stole, bought, ran over to get to where they are and the breaks and right place right time things dont play anymore. The world is not what it was in 95 and 2000. MS i fear is going to have a hard time keeping up and in 10 years will be struggling to figure out what happened to thier company and what went wrong
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About Digital Noise: Music and Tech

Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995 and reviewed the first Rio MP3 player for CNET.com in 1998. He's also a bass guitarist and an avid collector (and digitizer) of LP records. DISCLAIMER: This blog contains the personal opinions of the author and does not necessarily represent the opinions of his employers or of CNET Networks. As an IT industry analyst, the author occasionally agrees to nondisclosure agreements from Microsoft or other companies, and he will not violate the terms of such agreements on this blog.

He is a member of the CNET Blog Network and is not an employee of CNET.

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