Microsoft Takes the Long View With Zune

Finally, the gloves come off. After months of hints and speculation, Microsoft announced that, yes, it is headed for a showdown with Apple.

In one corner is Microsoft with its billions to invest in R&D, design and marketing to support its own media player -- one that is expected to tie in closely with its entire product line, including Xbox , Media Center and its entertainment and productivity software.

In the other corner is Apple with its iPod -- a music player that has become nearly as ubiquitous -- and just as essential to many, many fans -- as a cell phone.

In truth, the face-off between these two companies and their products -- in the case of Microsoft, its prospective product -- is not quite as dramatic, or cut-and-dry, as it may first appear.

Even Microsoft seems to acknowledge that it has a way to go before its Zune player might seriously challenge the iPod. The company is going to release one product this year, according to comments made to financial analysts by Robbie Bach, president of Microsoft's entertainment division.

News source: Tech News World


Next year, it will release additional offerings, he said, broadening the product line over time. Along the way -- perhaps over the course of five years or so -- Microsoft will spend "hundreds of millions of dollars."

It's a lot of firepower to throw at one market segment, especially as there is no guarantee Microsoft will win -- or even establish a sizable presence in this space -- when all is said and done.
"Microsoft has been known to pour millions of dollars of investment into a category and not have anything to show for it in the end," Charles King, principal of Pund-IT, told TechNewsWorld.

There is its purchase of Great Plains software, for instance -- with which Microsoft planned to dominate the SMB marketplace. Even reasonably successful endeavors, such as Xbox 360, have cost Microsoft more than it has made. "That division is still in the red," King said.

"Microsoft has a ton of money and a lot of smart people working for it -- it can create great products. But they haven't always been able to leverage those resources into new market domination," noted King. "Yes, they still dominate on the desktop and in office productivity, and they probably will for a long time to come."

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