Compete Blog: Can Microsoft’s Zune HD challenge the iPod?

Discussion
Oct 22, 2009
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By
Conrad Beickler

Through
a special arrangement, presented here for discussion is an excerpt of a current
article from the Compete Blog.
Compete Inc. is a web analytics company that focuses on understanding how
consumers use the internet.

Hopes
were high when Microsoft introduced the Zune in 2006. As the first MP3 player
to feature Wifi and an FM radio, the Zune stood out by allowing owners to
share music wirelessly with other Zuners. The concept never took off; Zune
adoption was limited, while Apple’s iPod line continued to dominate the media
player space.

In
late September, Microsoft launched its new Zune HD media player. Rather than
simply upgrade and refine the original Zune concept, Microsoft seemingly
followed the lead of the iPod Touch, building the device around a 3.3 inch
touchscreen, internet browsing capability and games/application downloads
via the Zune Marketplace. Apple made a series of announcements in the week
prior to the Zune’s launch, including improvements to iTunes, the iPod Touch
and iPod Nano, providing Compete with an opportunity to compare consumer
interest in the two media player brands.

Had
the Zune gained any traction against the iPod or had Apple’s announcements
of the prior week tempered enthusiasm for the Zune HD launch?

To
further explore this I looked at Compete’s data to see how interest shown
by online consumers in the Zune HD during its launch week compared to that
of the iPod Nano and iPod Touch in the weeks surrounding their recent upgrades.

  • The addition
    of a video camera to the iPod Nano resulted in a 700 percent week-over-week
    lift in traffic to Nano specific pages at apple.com during launch week.
  • Traffic to Zune.net, on
    the other hand, only saw a comparatively modest 90 percent week-to-week
    increase when the Zune HD launched.
  • What’s far more damaging
    to the Zune HD’s prospects is that the iPod Touch, which hasn’t changed
    drastically since its redesign in September 2008, drew virtually identical
    levels of interest from online consumers as the entire Zune.net site
    during the first two weeks immediately following the Zune HD launch.

Whether
a result of Apple overshadowing the Zune HD’s launch, or the lack of a
differentiating feature, consumer interest in the Zune HD has been lukewarm.
With Microsoft’s decision to discontinue all other Zune products that competed
with the iPod Nano and iPod Classic, the Zune HD remains as the company’s
only bid to compete with Apple. If early interest is any indication, the Zune HD could have a tough time grabbing a significant part of the market.

Discussion Questions: Is there anything
Microsoft can do to compete better in the media player category? Why has
the iPod so been successful at outdistancing itself from competitors?

Please practice The RetailWire Golden Rule when submitting your comments.

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9 Comments on "Compete Blog: Can Microsoft’s Zune HD challenge the iPod?"


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Kai Clarke
Guest
11 years 6 months ago

Of course it can. The Zune needs cutting edge technology, innovative design and an incredible price. Apple clearly has some technology, lots of design and a lousy price. If MS will just recognize how important this is, they can clearly start to develop a product that is ahead of the technology curve, provides a much better technology set, with innovative styling and an incredible price. Better screen, higher resolution camera, WiFi, Bluetooth, mega memory for an incredible price (and a small, thin shape) and MS will have a winner.

Paula Rosenblum
Guest
11 years 6 months ago

Game, set, match. It was over a long time ago.

I fear the same fate for the Microsoft stores.

The company has jewels that go unnoticed (anyone here ever use mesh.com? It’s really awesome. Ever taken a look at Windows Home Server? A great product), but seems unable to cede any space. While this worked 15 years ago with Internet Explorer vs. Netscape, it hasn’t worked with the Zune or XBox or Bing.

Every company has to accept that it’s not going to win every battle, and then move on.

Shilpa Rao
Guest
11 years 6 months ago

I agree with Kai; price and cutting edge technology can revive Zune. Microsoft needs to think faster than its competitor.

Ian Percy
Guest
11 years 6 months ago

At first glance one might think this is merely a battle over who has the best technology brains, but I think it goes much deeper and is more mysterious. Here’s a test for you. Think of the word “energy.” Now think “Microsoft”–and then think “Apple.” Even PC users generally have to admit “Microsoft” emits much less energy than “Apple” or even “Mac.” The greatest technology without this energetic spirit around it will fail and so Microsoft can add all the bells and whistles it wants and it won’t catch up.

Apple is not home free however, because it can lose this magical energy very easily. For example, which airline comes to mind when you think “energy?” For most it’s either Virgin or Southwest. My observation is that Southwest is working hard to keep its energetic spirit after being faulted for several violations.

The lesson for retailers is that if this energetic factor is missing in your operation, you can have a 95% off sale and it still won’t move merchandise.

Doug Stephens
Guest
Doug Stephens
11 years 6 months ago

iPod’s success over Zune has nothing to do with MP3 players or technology. I’m afraid Zune could do the dishes and walk the dog and it wouldn’t beat the iPod. This is about the overall fidelity of the Apple brand. In fact, the harder Microsoft tries, the more distance Apple picks up.

Doron Levy
Guest
Doron Levy
11 years 6 months ago

I chalk it up to ‘perfection in the customer experience which led to a cult-like following’. Microsoft is unable and/or unwilling to develop products and systems that deliver at the customer level. Have you ever had a problem with Windows 3.1 or XP? Ever try to to get a hold of support? Ever try to get support from Apple?

As my friends and network slowly turn their back on Microsoft and its products, I am seeing a bigger scale revolt. They could include a full size black forest cake with each Zune and I don’t think it will help them. My advice to Microsoft 10 years ago: focus on your customer. Those Apple commercials aren’t just whistling Dixie.

Scott Knaul
Guest
Scott Knaul
11 years 6 months ago

I agree with most of the comments, the iPod isn’t just about superior technology–it’s the user experience. Apple has tied it nicely to so many other avenues and put a holistic experience in one nice and very attractive little package. The iPod line isn’t without its flaws but how many people line up for 48 hours in front of a store to buy a Zune?

tim esse
Guest
tim esse
11 years 6 months ago

It isn’t Zune vs iPod. It is iTunes. Who wants to mess around with reloading your media library? The Zune could be 1/2 price and I’m still not going to mess with it.

Plus, they came out with that horrible brown Zune right away…what was up with that?

Kevin Price
Guest
Kevin Price
11 years 6 months ago

Forget what Apple and Microsoft are selling for a moment and think about what the customer is buying…and what they’re buying from Apple (well beyond technology, as others have mentioned) isn’t offered by Microsoft: reliability, convenience, coolness, ‘the best’, and other benefits not associated with either the ‘Zune’ name or Microsoft. The game was over before it even began. I have no idea what Microsoft was thinking in the first place.

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