David Carnoy over at Crave has already covered the latest crop of Zune rumors first published by TeamXbox. To summarize: the next portable device from Microsoft could combine a digital media player (like Zune) and a portable gaming device (like Sony's PSP or Nintendo's DS lineup) in a single device with a high-def touch screen. TeamXbox goes a little dreamy with the speculation, suggesting that this gadget might have built-in WiMax and connectivity to the MyPhone data storage and synchronization services that Microsoft announced for Windows Mobile 6.5.
T3's rendering of a Zune-Xbox portable gaming console.
The company isn't talking, but I can easily believe that Microsoft's going to release some sort of combination Xbox-Zune device. Here's why.
Some time in 2007, J Allard--who headed the Xbox business as it was starting up and is credited with much of Microsoft's success beating back Sony in the console space--moved into a new job and disappeared from public view. His job duties include coordinating product development across the whole Entertainment & Devices group (that's Xbox, Zune, Windows Mobile, and Windows Media Center, among other things), and overseeing incubation of new products. I can't imagine he's parked in some pasture somewhere--the guy's too smart and well-regarded at Microsoft, and has actual direct reports. I've heard rumors his team was looking into portable gaming devices but abandoned their plans. I've heard rumors that his team was designing the interface for the "Zune phone." But publicly--the cone of silence has been in place.
Flash-forward a couple years. Beginning in late 2008, Microsoft split the Zune team apart into two: hardware and software-plus-services. (CNET's Ina Fried broke the news in February.) As the TeamXbox article suggests, and Microsoft's rhetoric constantly reminds the world, the company sees software-plus-services as its future. The manager in charge of the Zune software-plus-services is Craig Eisler, and his official duties include creating a new platform for enabling the playback of digital media across Windows, Windows Mobile, and Xbox.
There's the key: Microsoft is taking the Zune software and services and making them the delivery and playback mechanism for digital media across all its products. I wrote about this before, in the context of the Zune Marketplace moving to the Xbox.
But why not integrate in the other direction as well--take gaming to the Zune?
Here's what I think happened. Allard's group has been incubating. Now, the incubation period is done, and the latest reorganization is getting teams in place to churn out actual, sellable products. The first such product would be the Zune HD/xYz/Xbox-Zune device we're hearing about now, which could come out as early as fall 2009. The second such product would be the "Zune phone," manufactured by third parties (probably HTC and LG) and featuring design specs similar to the Zune HD. That will probably have to wait for Windows Mobile 7, which means it won't be out until next year.
Regarding the WiMax speculation--it's not that outlandish. Samsung announced a WiMax touchscreen device in March. TeamXbox notes that the only WiMax phone available now is made by HTC--and guess who's responsbile for manufacturing more than 80 percent of the Windows Mobile phones shipped so far?
Of course, I'm compelled to note that we've heard this all before...more than two years ago, in fact, another publication wrote about a well-placed source who swore Microsoft would announce a WiMax-enabled Zune phone in March 2007. Didn't happen.
"Integrated innovation" was a Bill Gates mantra, and may leave the building when he retires. But even without Bill's blessing, outsiders often imagine Microsoft quickly stitching different products together into a more coherent whole. For example, why can't Microsoft operate a single download marketplace offering music, video, and games, and make that marketplace accessible from the Media Center interface, Xbox Live, Zune PC software, and its Mediaroom IPTV system? And come to think of it, Netflix CEO Reed Hastings joined Microsoft's board of directors last year--why not offer movie rentals as well?
The trouble with such scenarios is that they're easy to draw on a whiteboard but complicated to execute. Say you combine the Xbox Live Marketplace and the Zune Marketplace--how do you cut the 10 million current Xbox Live customers over to the new service without interruptions? How do you tailor the interface and featured content to the device accessing it? How do you convince owners of movies and downloadable video games, who thought they were licensing content to a relatively closed system (Xbox Live) to offer that content to millions of Internet-connected PCs, where the risk of piracy is higher? Worse yet, if you decide to take the tough road of integration, by the time you've coordinated development between all the different product teams, alerted partners and the sales channel to the new strategy, and finished the long march, the market may already have moved on to the next big thing.
Two fellow Microsoft-watchers, Todd Bishop of the Seattle P-I and Mary Jo Foley of ZDNet, have both commented on the move of former Media Center leader Joe Belfiore to the Zune team, which Directions on Microsoft noticed in our latest tracking of the Microsoft organizational structure. (Todd called me for comment and quotes me in his blog posting, but I haven't talked to Mary Jo about this, and am not the anonymous source she cites--I have no knowledge of the initiative she's blogging about.) Belfiore oversaw Microsoft's eHome initiative, which created the Media Center PC, and his background in video could indeed mean that Microsoft is considering building a video marketplace for Zune.
Then again...Rick Thompson, who at one time worked in the same broad business group as Belfiore (looking at "advanced scenarios" for Windows PCs) and has a background in the Microsoft Hardware division, is also a vice president in the Zune group, having moved there last October. Does that mean that Microsoft wants more hardware expertise on the team? Xbox guru J Allard continues to be involved as well, and we know that Microsoft's looking at developing games for the Zune. Then there's the whole Danger acquisition and rumored Zune phone.
Meanwhile, we haven't seen Microsoft trumpet any NPD figures for the holiday season, which leads me to believe that Zune 2.0 didn't sell very well, and is probably not in the No. 2 spot that Microsoft was aiming for.
In other words: Zune as a music-focused player is not competitive, and Microsoft has a lot of cooks in the kitchen trying to make something new out of it. We could see a bunch of Zune-branded devices with slightly different feature sets--the "traditional" Zune might add video content and simple games, but we could also see Zune-branded devices focused on portable gaming (competing with the Sony PSP and Nintendo DS) and with telephony functions (competing with the iPhone), but all featuring music playback and using the Zune software. Or, the brand might disappear entirely and be replaced by the next greatest thing ever. Whatever the precise brands and products look like, Microsoft isn't giving up on the portable entertainment space, and music will continue to be a part of that initiative.
- prev
- 1
- next
