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May 29, 2007

Microsoft nearly sells a million Zunes

Posted by David Hunter at 12:53 PM ET.

Dan Fost and Ryan Kim at the SF Chronicle hooked up with Robbie Bach, Microsoft’s Entertainment and Devices Division President for a serving of his trademark happy talk about the bright prospects for Microsoft’s sagging entertainment initiatives. Among the less than meaty tidbits was an update on the Zune which Bach reports will pass the million unit sales mark in June.

Q: Can you talk a little bit about the Zune overall? Will we see next-generation Zunes coming out, particularly flash-based players?

A: We’re still about nine months into having Zune in the marketplace. We’re very pleased with the progress. We’ve sold a little over a million Zunes. In the category we’re in, the hard-disk-based category, we’ve got about 10 percent market share. It’s a good start. It’s not an overwhelming start. I’m not going to pretend it’s some gigantic move.

As we look to the future, you’re certainly going to see us continue to invest in that category. We don’t enter things like that lightly.

There will be new things down the path (in the fall). We just came out with a special edition pink Zune and a watermelon-colored Zune, which are the personal favorites with my kids.

Actually, in the podcast, Bach says sales will top a million by the end of June. By way of reference, Apple shipped about 24 million iPods in the same period. As for the new colors, the pink Zune immediately relegated the “brown is the new black” Zune to a well deserved 3rd place, while the watermelon red Zune isn’t generally available yet.

Q: How is the Zune marketplace doing overall? Sandisk just put out a new Wi-Fi player to enable people to download wirelessly. Are you looking at the Zune having that?

A: The Zune marketplace is doing very well. We have a pretty typical attach rate of songs to Zunes. Certainly, like on an iPod, if you looked at the number of songs people have on a device, the majority are CD-ripped songs.

Not unexpected – it was hard to believe that the game would really change with the Zune.

As to the Wi-Fi, we think the idea of these devices being connected where you want them connected is very important. That’s why we shipped the original Zune with Wi-Fi built in. The cool thing about that is, the innovation can all be in software.

Too bad it didn’t make version 1.0 and as for the SanDisk Sansa, its Wi-Fi feature is hardly perfect either, but they seem to have found a better use for it than the Zune. Speaking of which:

Q: Are people sharing music by beaming songs from Zune to Zune? Do you have any way to gauge that?

A: People are sharing.

Seriously, how can they tell?

When your installed base is a million, the benefits of sharing, frankly, aren’t as wide as we hope to see in the future. One of the challenges for us is continuing to build on the install base.

Sharing is a tip of the iceberg of what you can do in the social nature of music, and what you can do when you have a device that you can connect when you’re at a Starbucks, when you’re at work, when you’re at home. That really, over time, will change things, for Zune and for consumers.

“Some day it’s going to be swell,” is hardly a reason to plunk down cash for a Zune now. Further Bachian observations on other Microsoft Entertainment products in the full article.

Update: Joe Wilcox suggests that Bach really meant 1 million Zunes shipped to the channel and not sold and in customers hands.

Filed under Apple, Argo, Coopetition, Executives, Microsoft, Robbie Bach, Zune

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One Response to “Microsoft nearly sells a million Zunes”

  1. Zune same old, same old -- Microsoft News Tracker Says:

    [...] Microsoft confirmed the prediction from last month that they will have shipped 1 million Zunes to the channel by the end of June. That’s not 1 million Zunes in customers’ hands, of course. More exciting for the beleaguered Zune team were the NPD stats for May that showed the Zune with 11.3 percent of hard disk MP3 player sales at US big box stores. That’s up a bit from April’s 9.2 percent. [...]

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