Microsoft: The Zune is here to stay

After a very dismal week at Microsoft, the company posted its Q-10 earnings late Friday afternoon. The Zune platform posted a revenue decrease of nearly $100 million, or 54%. Over the weekend critics all around the blogosphere have been calling for Microsoft to give up on the Zune.

Adam Suhn, director of marketing for the Zune platform, told the Seattle Pi that several already known factors led up to the huge lose for the company. "Everyone knows that the economy is not what it was a year ago and that [it] is hurting some folks", and later went on to say "So I think those are things that affected everybody's sales, including Apple." Apple's iPod platform posted a 16% revenue decrease last quarter, along with various other MP3 device manufacturers.

Suhn then announced that Microsoft was not going to give up on the Zune platform, and that the company was right on track on delivering the next generation of Zune software and hardware. Microsoft is on the road to delivering a new lineup by the end of this calender year, and is planning "fast and furious[ly]".

Suhn also told PaidContent that Microsoft was looking beyond the Zune device and has a "broader vision than just selling MP3 players". Microsoft is continuing to invest in centralized entertainment experiences that are brought together by the Zune software, that will not only be available to Zune device owners but for "other 'tuners' as well". He noted that "we are in this business for the long term and [are] committed to it".

With the global economy in the slumps, and consumer spending down more now than in December, can the Zune rebound from the loss? Microsoft is apparently not going to give up on the Zune platform anytime soon, and with companies like Apple announcing that songs in the iTunes store are soon to be DRM-free, what kind of innovation is going to be required for Microsoft to firmly make a stance in the MP3 market?

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Umm.. know what your saying before you post a comment plz.. Not all Zunes are brick-like.

Yes the Zune 30/80/120 is brick-like.. but that's only beacuse it's hard-drive based.

All of the flash-based Zunes are pretty thin, and the interface is so much more nicer than the iPod's.

Ummmm....actually only the Zune 30 can be referred to as a brick. The Second Gen models are much more elegant and pleasing to look at. Its not a freakin iPod but its certainly no ugly ducking.

Damn you Microsoft!
Start selling this in Japan and you'll have at least one guaranteed sale: me.
Don't make me give up waiting and go to the dark side and get a touch instead.

Since you're in Japan it seems, why would you get a touch?!?!? What happened to that hardline Japanese brand loyalty? You should be getting a Sony or something. hehehe.

I like the Zune software and user experience, but I really wish Microsoft would do something with the look of the device. I was really inclined to use a Microsoft product, but ultimately the iPod Nano was too pretty to ignore... LOL If Microsoft could come up with a really elegant look for the device I would buy one in an instant.

That is an interesting thought. I really dont think that the Zune Team focuses on the hardware - they are a software company.

Try the software, you might be surprised and more inclined to go for the HW.

If there was a touch enabled Zune, I would buy it in a second. As it is, I still love my 80gb 2nd gen Zune. The only thing that Microsoft is doing wrong by the Zune is by offering stupid little throwaway games. Here's a protip, Microsoft: the Zune is not a gaming machine, will never be a gaming machine, and your pathetic attempts at sugfgesting it might one day be one are just that... pathetic. I say the same thing about the iPod or iPod touch/iPhone, though.

b4zzy said,
Where is LTD and his oh-so-important comments against Microsoft?

I covered all those a few days ago.

Not much more to be said about this topic. Time to wait and see what Microsoft has in the works.

Zune 80 here, dumped my iPod for it. Love it and use it every day. Just get the marketplace here already! And integration into xBox! It'll blow up the iPod in no time.

Hurry up and 'officially' release it in the UK! I've seen people using them over here but they are obviously imported from the US, and they look quite cool!

I have had a Zune 80 for over a year and love it. My only complaint is the screen resolution, it should have been higher for its dimensions. I recently got an iPod Touch and it frankly does everything my Zune 80 does and more, outside of the storage space. If I could use the iPod Touch with the Zune software (which is really awesome) that would be the ultimate for me. iTunes on Windows just doesn't perform smoothly.

The zune is a great device and has alot of nice features. It needs more accessories though. My stereo in my truck supports the ipod and with an adapter I can control it through the stereo. I also have some speakers for my ipod to dock into.
Also I HATE the zune software. I had such a hard time creating an account. My first one wouldn't let me log in again until I agreed to the new TOS but it would not take me to that page. I manually got there but it wouldn't save my choice. So I had to create another account and do it again. And the software is poorly organized and didn't work as well with my podcasts as itunes does.

Actually, most reviewers say Zune Marketplace's management of Podcasts was better than iTunes. Did you try the most recent version of the software.

Over the weekend critics all around the blogosphere have been calling for Microsoft to give up on the Zune.

And this is why competent companies don't rely on bloggers who have no job other than volunteered whining and moaning on the Internet, to make business decisions for them.

Microsoft knows what they are doing.

C_Guy said,
Over the weekend critics all around the blogosphere have been calling for Microsoft to give up on the Zune.

And this is why competent companies don't rely on bloggers who have no job other than volunteered whining and moaning on the Internet, to make business decisions for them.

Microsoft knows what they are doing.


QFT, this is why a lot of bugs in the beta sector at Microsoft go without getting fixed. If people would give them percise feedback, and not "Windows 7 sucks because a, b, c, d." or "Zune sucks because it has a small screen." their feedback would be taken into consideration.

Zune is probably used by all those porn fans that have to use the WMV format. And why would Microsoft need to pull the plug? The xbox division of the company losses are abysmal compared to this and Microsft can afford whatever they have in mind.

Vakerorokero said,
Zune is probably used by all those porn fans that have to use the WMV format. And why would Microsoft need to pull the plug? The xbox division of the company losses are abysmal compared to this and Microsft can afford whatever they have in mind.


Except for the part where the Xbox didn't lose money, just made less profit vs gross revenue than expected.

bob_c_b said,
Except for the part where the Xbox didn't lose money, just made less profit vs gross revenue than expected.

Do you own a Zune for porn reasons? Either way...you sure seem to know your porn distribution formats.

bob_c_b said,
Except for the part where the Xbox didn't lose money, just made less profit vs gross revenue than expected.


I think he was referring to the fact that until only recently, the xbox platform was a neet loser for MS financially.

You can't llok at just hardware with MS products ... MS is not a hardware company, they are a software company.

Anyone that explains some weird version where Microsoft is making money of the xbox is in denial. Why do you think they charge so much for accessories? Microsoft has always wanted to own the living room and has tried many times and now it's finally found a good tool to deliver all their business.

And yeah, most porn sites use WMV. Pirated movies use DIVX or XVID. Internet and porn go hand in hand.

You guys are just twisting his words around, the Xbox devision has been in the green since around 2006 and is making money, technically still a "profit" either way you look at it.

Now if it's still in the overall red due to the initial R&D costs, that's a different story. But no one here knows how much MS's initial investment was since, as far as I can remember, they never said exactly.

But it's also true with game systems that you lose on the hardware for the first X years and then start making money. Though most of it comes from software sales, accessories and in MS's case, Live.

If they're still behind or not, only MS knows, but since they have cut the price a few times already on the hardware, i'd venter to say that they're pretty close to, if not already have, made most of that initial R&D cost pack.

They'll probably do some touch device like what Apple has, probably a bigger 4" screen would be nice, and a higher res with TV out plz.

And maybe bigger flash versions, 32GB flash? With the bigger screen but thinner and lighter.

It should be interesting either way, but I think MS should also update faster, they've been kinda slow really.

Probably trying to work out the licensing so they can have the Zune store working and up with content.

It's always been my thinking that it's the media content people holding the Zune back from coming to the UK and the rest of the world.

GP007 said,
Probably trying to work out the licensing so they can have the Zune store working and up with content.

It's always been my thinking that it's the media content people holding the Zune back from coming to the UK and the rest of the world.

The same for the European Xbox marketplace. It's a bloody joke, we get maybe 5% of the content the US marketplace does.

StealMySoda said,
Glad to hear this. I stay away from iPods just because they are...iPods.

Yo Dawg! Herd you like ipods so we put an ipod inside the ipod so you can ipod while you ipod.

Why would someone pay for a more expensive iPod or Zune when there's better and less expensive alternatives. It's beyond any understandment.

Zune lost market becouse of the Ipod Touch, Iphone and the Ipod Nanos. There Is no dought that the Zune 120gb is better than the Ipod of 120gb, but for the rest of the Ipods (Ithouch, nano) there are no competition. YET!

Hi Silverskull, heheh that Is my opinion, I agree that the flash Zunes are good, but I think that the Nanos are better for those resons:
- Bigger screen;
- Big Album Art (I love big album art);
- Find Songs by Genre > Artist;
- Shake Shuffle

http://www.youtube.com/watch?v=VJc6e-IxqFs

If I would buy a flash I would chose a nano, but there Is no way I will get one, I am still waiting for a 200gb + Zune.

I dumped a Nano for a Zune 4GB. As to your points.
- Nano is .2" bigger. Whoop-dee-doo
- Eh? Zune's is pretty damn big.
- Must be good for you; I don't need it.
- See above.

I chose a Zune because:
- I don't have the retarded software glitches on the device I did with the Nano.
- I don't have the retarded software installed on my computer (iTunes).
- I like the interface better.

To each their own, I guess.

Billy Gun said,
I agree that the flash Zunes are good, but I think that the Nanos are better for those resons:
- Bigger screen;
- Big Album Art (I love big album art);
- Find Songs by Genre > Artist;
- Shake Shuffle

- By only 0.2 inches.
- The Zune has big album art as well. They recommend you stick at least 500x500 covers onto your albums for the best viewing.
- Umm, you can do this on the Zune as well.
- Fair point, but the new Nanos are a year newer than the flash Zunes, so it's had time to implement the accelerometer.

Comparing the Zune to the iPod line is apples to oranges. Yes, they are oboth media players, but that's it. The Zune is a software focused ecosystem and iTunes/iPod is a hardware based system.

Where Apple has a variety of devices with differing features, the Zune is basically one device. Yes, there is a flash based device, but it offers the exact same features as the HDD device.

the iTunes/iPod business model is based on hardware sales - that is why there are so many devices, new models, etc. and why Zune adds/removes features with firmware updates.

@Fanon, I agree with you about Itunes, spetialy the latest version, I also agree about the interface. But I think that the screen feels a way bigger on the nano. I sold my 60Gb Ipod, I just used Itunes to transfer songs.. no more than that. when I bought my 60Gb Ipod (Ipod Photo), there was no Zune, so I had no choice.

@MightyJordan, The album art on the Nano sems bigger to me.. just like the 120gb Zune;

@eth3l, for sure one day the zune will introduce touch models and have It on some phones..

@geoken, yes that Is the point, and Zune Is just on US and Canada.

duneworld said,
Was the Y2K9 bug a factor in the Zune's revenue falling so much?

No, because it only affected the Zune 30 model, which they discontinued about a year ago.

It's just a music player. It's the music and content that you love, not a pile of junk manufactured in China, for buttons. Sadly MSFT have not chosen to sell their wonderful player in Europe. I feel so deprived having to use a $40 unbranded Chinese junk MP3 /MP4 player, that has served me well for over a year, with no stupid DRM. The previous $40 one, also goes strong sitting at the side of my bed (over 2 years old.)

^ Got to love those. My tiny mp3 player I've got it for free in a magazine and does its job pretty good at playing music (without DRM) and radio. It's the size of an USB pen, talk about portability. The thing is I don't even use it that much...
Personally I don't see much sense in buying a portable device to just play music or movies. I can have all of that integrated into a mobile phone with the advantages of using it to make phone calls, access the Web and e-mail, take pictures and record with its camera, watch TV, (...). All in one single device. (y)

Portable media players have no future.

boho said,
It's just a music player. It's the music and content that you love, not a pile of junk manufactured in China, for buttons. Sadly MSFT have not chosen to sell their wonderful player in Europe. I feel so deprived having to use a $40 unbranded Chinese junk MP3 /MP4 player, that has served me well for over a year, with no stupid DRM. The previous $40 one, also goes strong sitting at the side of my bed (over 2 years old.)

Sure, the music is great... but I've tried a LOT of PMP and Zune is my personal favorite. Plus the Zune music player software for Windows has a solid look and feel. I recommend it to people who don't have a Zune PMP (yet).

Actually portable media players have a bright future for those of us for whom an all-n-one option is not viable. I have 4700 song collection now and I'm not a fair weather listener so its a safe bet that my collection will only grow. Having said that, I don't want to have to stop listening to my music because a call is coming in. I don't want to feel like I can't play my music all day as I work becaue I fear running down my battery and storage for my colleciton would definitely be an issue. So the dedicated device works best for myself and others like me.

I actually like my zune bettter then my ipod touch. Microsoft should realy start selling the zune in more countries and ramp up their advertising.

THIS. This is what's keeping the Zune from gaining ground. Start advertising in Europe and Asia. They finally started in Canada around August. What's stopping them?

Gamerhomie said,
THIS. This is what's keeping the Zune from gaining ground. Start advertising in Europe and Asia. They finally started in Canada around August. What's stopping them?

The Zune is subsidized by the music store. Since they can only legally operate one in the US and Canada (for now), they have no reason to sell it outside of there. I got my Zune 30 (it was never released here in Canada) through some gray market store...and all over the packaging it said "US ONLY."

I couldn't agree more majortom1981. The Zune platform is awesome! They just need to keep the advertisements up and they HAVE to get this thing to other countries. A Mac version of the Zune Software would also help, but I doubt many Mac users will go with Zune over iPod (just a guess).

The "social" idea is just great for finding new music. I've got my friends list full with ppl who share the same interest in music and are RL friends. Whenever my Zune sync's with my computer, it also sync's with my friends most recent plays and top songs. Its really quite neat.

Like it was said above it's probably a licensing problem for the EU, without the Zune store, the player itself will be limited.

One thing I want MS to do is link the Zune store AND the Xbox Live Store together. Xbox live has videos, zune has music, just bring the together in one package.

Also allow users to transfer d/led videos from Xbox Live to their Zune so they can watch them, I bet you'd get a big jump in Zune sales if you use it with the Xbox 360 that way.

GP007 said,
One thing I want MS to do is link the Zune store AND the Xbox Live Store together. Xbox live has videos, zune has music, just bring the together in one package.

Also allow users to transfer d/led videos from Xbox Live to their Zune so they can watch them, I bet you'd get a big jump in Zune sales if you use it with the Xbox 360 that way.

At CES one of the speakers announced big changes for the Zune so expect better connection between it and the Xbox 360.

GP007 - This is already in the works. I agree that MS should have be moving a helluva lot faster than they are but we'll likely see more integration between Zune Marketplace and XBox Live sometime this year. I'm a big Zune fan and It is killing me waiting so long for everything. I don't have an XBox yet but im waiting until the next version hits store shelves If it happens before Zune and XBox finally hook-up. Love my Zune and I make no apologies about it.