Analysis: Microsoft’s “iPod Killer” Zune Will NOT Let You Buy Songs On-The-Go

Authored by Jay Baage on September 14, 2006 - 7:43am.

We can get a glimpse of Microsoft’s strategy for challenging Apple in the digital music market in a press release from the company this morning revealing details of the first products released under the Zune brand. Here is a key phrase representative of their strategy “Marking the next big milestone for its Connected Entertainment vision…”:

“The digital music entertainment revolution is just beginning,” states J Allard, Vice President, Design and Development, at Microsoft, who is leading the charge for building the family of Zune products. “With Zune, we are not simply delivering a portable device, we are introducing a new platform that helps bring artists closer to their audiences and helps people find new music and develop new social connections.”

Sounds good to me. Microsoft is saying that it is all about the experiences and the ability to share those experiences with your peers. I believe that the social aspect is key to a successful media service as well as a successful portable media device going forward.

Microsoft's Zune Marketplace (it’s answer to iTunes) will let customers buy individual songs or pay for a Zune Pass subscription to download an unlimited number of songs for a flat fee. So far, no video is available on the Zune Marketplace.

Wireless Zune-to-Zune sharing will let consumers spontaneously share full-length sample tracks of select songs, homemade recordings, playlists or pictures with friends. Those receiving shared songs can listen to the full track of each for up to three times over three days. If you like a song you hear and want to buy it, you can flag it right on your device and easily purchase it from the Zune Marketplace.

HOWEVER, my concerns about the device’s limited wireless capabilities were realized, which at this point is supposedly one of Zune’s main competitive advantages over the iPod.

The ability to share media from device to device is great, don’t get me wrong, even if there is a DRM limitation of three plays over three days is involved. But at first it seemed like the WiFi-connectivity would also let consumers buy songs on-the-go and download them straight to the device without having to connect it to a computer. A call to Microsoft’s PR team confirms that this is NOT the case - you will have to connect your Zune player to a computer to purchase music. That gives cell phone operators that are selling new advanced music cell phones and wireless music services an instant advantage over Zune.

For DMW readers, the specifics of the actual device come as no surprise. We revealed pictures and specifications that leaked out months ago. As the company already made clear, Zune will not by manufactured by Microsoft, but by Japanese electronics maker Toshiba Corp. It will be available this Holiday season in the U. S. in black, white and brown. My guess is that you will see a pink version as well in the near future.

The 30 GB device comes equipped with a 3-inch (7.6 centimeter) liquid crystal display screen and wireless WiFi connectivity that allows users to send, receive photos, songs and albums with nearby players.

The software is my remaining question about Zune. It needs to work as flawlessly as iTunes. If it is in any way buggy or has an inferior user interface, consumers will prefer to keep their iPods. Before I actually get to try the device out, I can’t say what I think.

A positive surprise is that every Zune device comes preloaded with content from record labels such as DTS, EMI Music’s Astralwerks Records and Virgin Records, Ninja Tune, Playlouderecordings, Quango Music Group, Sub Pop Records, and V2/Artemis Records. This is very smart and it helps the experience to get started with great music and videos right out of the box, unlike the iPod that comes blank.

In a Reuters article today, figures from the research company NPD shows that iPod holds more than half of the global digital media player market, while iTunes accounts for over 70 percent of U.S. digital music sales. In the United States, the iPod has more than 75 percent of the digital music player market, according to NPD. Soon, the cell phone carriers will take a piece of the pie, as well, when the new music cell phones become more common.

Microsoft will, no doubt, be fighting an uphill battle on the portable music market against Apple iPod on one hand and music cell phones on the other. All these initiatives will certainly make for a very interesting year in 2007 for the portable and mobile music market.

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Comments

No 80 GB?

Submitted by zune (not verified) on September 14, 2006 - 8:15am.

If they dont release a larger capacity Zune now, they will need to in the near future.