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January 5, 2007

Zune holiday glass half empty or half full?

Posted by David Hunter at 3:15 PM ET.

Some holiday sales estimates are in for Microsoft’s Zune personal media player and while the Zune wasn’t a complete bust, it sure didn’t take the market by storm either. First up, NPD’s North American retail sales report via Troy Wolverton at The Mercury News:

In the five-week period from Nov. 19 to Dec. 23, iPods accounted for 57.3 percent of all players sold at a panel of electronics stores that notably didn’t include the Cupertino company’s own retail outlets. Apple’s share was up from 42 percent for a similar period last year. Milpitas memory-products maker SanDisk was No. 2 with 19.2 percent of units sold, down from 22.1 percent last year. Microsoft, which debuted its Zune player in November, came in fourth behind Creative Technology with 2.8 percent of the market. Creative had 3.4 percent.

Ina Fried at CNET reports that another market research firm, Current Analysis, had a similar estimate:

Although Microsoft’s Zune captured a decent slice of the hard-drive-based audio player market at large retail stores, it failed to crack into the top 10 list of models in overall sales, according to market researcher Current Analysis.

The top 10 models included 8 different iPods from Apple Computer as well as 2 models from SanDisk, according to the firm, which tracks sales at Best Buy, Circuit City, CompUSA, Staples and RadioShack.

The Zune, meanwhile, captured 12 percent of the hard-drive-based player market for December, although Current Analysis’ study does not include many retail sales outlets, including Wal-Mart Stores and Apple’s own retail stores. An earlier study by the same firm partway through the holiday season found roughly similar results.

Hard disk players are only about a fifth of the current player market. These results are also similar to those reported by NPD in mid-December. Opinions on this performance vary greatly depending on the pundit’s bias, but I do have to observe that it is possible to say “Microsoft is in it for the long haul” and “Microsoft never gets it right the first time” too many times.

Related: The Wall Street Journal today has a profile of Robbie Bach, the President of Microsoft’s Entertainment & Devices Division which is responsible for the nontraditional Microsoft consumer products like the Xbox 360 and the Zune. There’s lots there about thinking in new ways, but nothing about return on investment.

Filed under Argo, Executives, Microsoft, Robbie Bach, Xbox, Zune

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