Microsoft News Tracker

It wasn’t an announcement. It wasn’t a demo. It wasn’t even a preview. But via an interview in Billboard magazine and a plethora of press statements, Microsoft confirmed the gist of the rumors and ‘fessed up to be working on a family of personal media players and an associated online media purchasing service under the brand name Zune. The best roundup of all of the press sources (official and unofficial) I have seen is from Ryan Block at Engadget. The net: Zune is coming this year and not only targeting Apple’s iPod and iTunes, but also emulating Apple’s business plan:

-The Zune brand is intended to be an entirely vertically integrated end-to-end solution, not unlike the iPod / iTunes / iTunes Music Store triumvirate.

- The service and device will not be PlaysForSure compliant, meaning you will not be able to use your Zune player with Napster or Vongo, for example. This will be an entirely new system. Microsoft will continue to support and develop for their PlaysForSure initiative, but all things PlaysForSure are handled by two (sic) entirely separate division that will not have any crossover.

The latter point - that Microsoft’s erstwhile PlaysForSure partners are left out in the cold by the Zune - is one nail that I can never resist hammering (e.g. [1], [2]) and it seems to be quite a popular target:

Om Malik:

More on that some other day, but the real and perhaps the only story in the news is that Microsoft’s partners - from device makers to music services - just got double crossed by the company they choose to believe in.
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Let me break this down: Zune - the devices, the platform, and the store/service - will compete with everyone from Apple (of course) to Creative Technologies, iRiver, Samsung, Archos, Rhapsody, Napster, Yahoo Music and anyone dumb enough to buy into Microsoft’s visions of Urge, Media Player, PlaysForSure etc.

Microsoft could argue that Zune would be unique and those others can still do business. But it is also a classic example of why Microsoft is lumbering bureaucratic morass wrapped in a can of conflicts. A modern day version of medieval fiefdoms, perhaps? Take for instance, Urge which is built into Windows Vista, and is what I guess you could call an almost integrated experience. What happens to consumers when faced with the choice of Zune or Urge!!! Answer - iPod.

Jupiter Research’s Michael Gartenberg:

Early market share, however, isn’t likely to come from disgruntled iPod users looking to switch. The real losers in the short term are likely to be the likes of Creative, iRiver and other former partners that have failed to deliver to market share from Apple and will now find themselves not only competing with Apple but with their former partners from Redmond.

As uncomfortable as the position in which Microsoft finds itself is (and perhaps also dangerous to other future partnership ambitions as well), going it alone on personal media players is also likely the only way to succeed in that market as Nicholas Carr succinctly explains:

The Windows way worked for PCs because PCs are general purpose devices that become more attractive as more software and peripheral devices become available. An open architecture encouraged the development of lots of software and devices that expanded what a PC could do in ways that customers valued. They were even willing to put up with crashes and reboots and driver conflicts and all the other annoyances inherent in managing complex, heterogeneous systems. A special-purpose device, like a music or media player, is a different beast altogether. Customers want it to do what it’s supposed to do, and do it really well - and look good while it’s doing it. It’s fine - and in fact valuable - to have a lot of compatible accessories, as long as those accessories don’t mess up the internal workings of the core system itself. That’s been the Apple way with iPod, and now it’s the Microsoft way with Zune.

Some folks would argue that the Apple way is pretty good for consumer PCs too, but I digress.

After the startup turmoil gets cleared away and assuming Microsoft can deliver product on time, the question remains whether even Microsoft all by itself can make a credible play in consumer electronics where cool is just as important as functionality. Looking at the bizarre “viral marketing” video at Microsoft’s promotional site, comingzune.com, suggests that they have a long way to go. Who do music fans want to identify with: some weird guy with a rabbit or the folks rocking out in the iconic white earphones ads?

Finally, speaking of Web sites, Microsoft has two employees “Zune blogging” at Madison and Pine and Zune Insider; and spending a few minutes nosing around the web shows that a Zune ecosystem has already started with sites of varying quality like Zune Nation, Zune Owners, Zune News Site, Zune Zone, Zune Info, and Zune MP3 Player Deals jumping aboard for the ride.