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November 14, 2006

Zune off to slow start?

Posted by David Hunter at 7:05 PM ET.

As heralded by yesterday’s pre-launch events and announcement, Microsoft’s Zune “iPod killer” went on sale in the USA today, but consumer interest seemed to be modest according to Franklin Paul at Reuters:

But initial shopper interest suggested the Zune media player — heavily promoted in gadget reviews and television talk shows — was in for a slow building process.

An employee at the Best Buy store said two shoppers entered the place as it opened and purchased Zune players, and that about 20 were sold within the first three hours.

Customers touched and tapped Zune players on display, asking employees about the differences between Zune and iPod.

However, at the Virgin Megastore in New York’s Times Square two circular displays sporting Zune players with earphones attached were unmanned that morning, save for store employees restocking supplies.

Anecdotal evidence is always of uncertain value (there’s more at CNET and BetaNews), but it’s clear that purchasers weren’t lining up around the block. I don’t know that game console-like fan loyalty was really expected by anyone and a Tuesday in the week before the American Thanksgiving holiday is hardly prime shopping time, but the point of Paul’s article is that expectations are low:

Microsoft itself has acknowledged that the Zune investment may take years to bear fruit, and analysts upheld the expectation.

“Apple will not feel any bit of discomfort from Zune, certainly this holiday season and a good part of next year,” said IDC analyst Danielle Levitas.

“Microsoft is going to put tons of money in this over time, much like they did with the Xbox” video game console, she said. “It’s not about the first generation (of devices).”

Finally, one more indicator: the black Zune is currently number 6 on Amazon’s electronics bestseller list, although there are three Apple iPods ahead of it. If you’re keeping track, the brown Zune is #43 and the white is #71.

Filed under Apple, Argo, Coopetition, Microsoft, Zune

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