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Wednesday, August 16, 2006
Zune vs. iPod: Why Microsoft might lose the battle?
Playfuls.com : As you all know already, Microsoft finally confirmed their long rumored plans to launch an iPod killer by the end of this year (more precisely, sometime around Christmas). But are they really going to kill it?

Let’s think of the facts we are facing: first of all, Zune is meant to be an iPod killer. So there is one insurmountable…catch that Microsoft is not yet ready to deal with: even the nick-name points to the dominant rival (Zune as “the iPod killer”). Microsoft is probably intending to remove as much as possible the iPod from customers mind but even before its official “birth” Zune is associated with it. Despite the grim and threatening nick-name, Zune is seen as a competitor for “the king” not as a stand-alone product, with its unique features and advantages.

That means that when a customer wants to buy a Redmond-manufactured MP3 player (or whatever they are readying, but we’ll talk about that later) they are going to make at least one comparison: is it or is it not better than the iPod? And do you think Microsoft officials are going to be happy about that?

Allow me to remind you another “classical” example: Xbox vs. PS2. In 2001, when they launched the first edition of Xbox, both customers and analysts saw it like a normal entry for Microsoft into the increasingly big gaming market. No one thought Xbox would be THE “PlayStation killer”, probably because Sony already had a few strong rivals like Nintendo or SEGA.

But this is not the case with iPod. Apple’s product has become a mass phenomenon and, accompanied by the music download service iTunes, it dominates the digital-sound world and it dictates the price. And who dictates the price also gets the lion’s share, wouldn’t you agree?

iPod even transformed into a common noun, just like Google recently transformed into a transitive verb. Do you imagine Zune becoming a noun any time soon?

Apple first lured clients with the original design. Apple’s products are now undoubtedly distinct among all other products, and this has turned into a great asset for Steve Jobs’ company. He can now rely on a huge community of Mac users who would rather cut a hand than give up their good ol` Macintosh… Moreover, the uniqueness of Apple’s products has been awarded by the Queen of England: Her Highness greeted British-born Jonathan Ive, senior vice-president of design at Apple, with a noblesse title, for his fundamental contribution at developing the design of iMac, the G4 Cube, the iPod and the Mac Mini.

Even sports-equipment producer Nike could not ignore it: Apple and Nike have signed a collaboration contract for the common release of Nike+iPod Sport Kit, which allows Nike+ ready footwear to communicate with the Apple iPod Nano through a sensor in the Nike+ footwear and a receiver plugged into the Nano. The Nike+iPod Sport Kit allows the runner to receive audible updates on speed, distance and calories burned upon request throughout the run.

This is what the Redmond software company is facing and this is why Microsoft looks now like a small hyena compared to the giant lion that Apple is in the digital music. A thing Steve Ballmer and co. cannot accept. But I really don’t know how they will manage to get rid of the “iPod killer” etiquette for Zune in the future, since people are at best waiting for “a better product than the iPod”, not a revolutionary one that should make them wait in line at night (like it happened with X BOX 360, in November 2005).

In other words, Zune is rather perceived as a “killing machine” meant at beating iPod, not as a gadget meant to conquer our digital world (which in this case should still remain iPod’s turf). And there’s more: in study named “hundred-university student survey”, conducted by Student Monitor at the beginning of June 2006, it has been revealed that students prefer having an iPod rather than buying a beer. It is more than good news to the parents since it is the first time in ten years when something else than drinking reaches the top of the preferences…

Moreover, I really don’t think that Zune will achieve as many as iPod did: its design is not spectacular (if what I’ve seen until now is really the final product) and its features are also not that impressive (although superior to the current iPod). If rumors that project Argo (in which Zune is included) is lead by J Allard, former head of X BOX project- are true than I guess we should expect an X BOX-like MP3 player. But is that enough to shake “the colossus”?

And just think that Microsoft does not have a positive history about music and related stuff. The European Union forced them to release a Windows Media Player-free version of their flagship OS, following accusations of monopolistic policies. If Zune comes out for Christmas, it should definitely use WMP to play the digital content, isn’t it?

But in order to avoid new fines applied in the EU space, Zune should be interoperable with other services, including…iTunes (remember the law France adopted recently concerning iTunes and iPod and referring to interoperability?). Actually there is a strong indication that this might be true: Microsoft plans to cut from iTunes’ market share with a piece of software integrated into its small MP3 player that will examine your current iTunes library for songs you've already bought from iTunes and let you download them from the Microsoft store for free. How about that?...

And don’t forget about URGE either. When the Redmond giant launched the latest version of Windows Media Player they integrated into it a music download service called URGE, which was actually built in cooperation with MTV. The interest for it was from the beginning quite small (can you name more than 10 buddies who claim they’ve renounced at iTunes in favor of URGE?) and this is why Microsoft is thinking to get rid of it and to offer a proprietary rival to iTunes. An iPod killer is nothing without an iTunes killer, wouldn’t you agree?

Though the success or failure of the Argo project remains to be evaluated in the future, Microsoft must deal with yet another challenge. How will Zune affect its partners, among which Creative and Samsung are the most prominent?

Up to this moment, MS’s strategy in the battle against iTunes and iPod was to make alliances with third party manufacturers and music services. With Zune on the market those allies will become competitors and Microsoft will probably cut from their market share too. Quod erat demonstrandum.

Unfortunately for Microsoft, the intensive rumor-mill that preceded Zune’s official confirmation turned out to be quite a disadvantage. Although we, the customers, should rejoice seeing the competition is getting sharper, Microsoft has too many unanswered questions before launching Zune. I don’t feel sorry for them, I’m actually glad to hear about their initiative, but I just wonder what do they think when they see their up-coming product defined using the rival’s product.

But what exactly is Zune like and how does Microsoft plan to replace the iPod and iTunes with it?

Well, the MP3 player that Microsoft is reading now boasts, besides the long commented wireless-fidelity capabilities, with the possibility to receive a bonus of some kind if the owner of the gadget agrees to watch entirely an advert presented on the screen (bonus that ranges from a discount coupon to voucher) and probably a larger screen. The gadget shall receive an ad from an “Ad-Node”, through a sensor integrated into the MP3 player, which is another indication of the iTunes rival that the Redmond giant is preparing.

Microsoft also hopes to attract users with is the possibility to share songs with those detaining the same Redmond-built device, using the wireless capabilities. You like a song, mark it for download and the rest is done by the MP3 player (aka the iPod killer).

Rumor has it that Microsoft is even already in talks to secure licenses to sell digital content for its future MP3 player.

Speculations have also been made about a larger screen than the current iPod’s and a serious orientation towards "Connected Entertainment", with interoperability between the device and X BOX Live! or Windows Mobile-powered handhelds.
posted by NaxeruL @ 10:31 AM  
1 Comments:
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