Is the Zune catching on?

I actually thought the Zune was dead, but I’ve seen 3 people with them in the last week. New ones. One person told me they have a model that is almost comparable to the ipod touch (though with fewer features), but cheaper. I’ve also been told that their software kicks itunes’ ass.

I’m completely out of the loop on gadget technology, and just asking out of pure curiosity. My phone already does about 75% of what these things do, and I’m thinking that by the time I get a new phone, it’ll do more like 95% of what they do, and won’t take up an extra space in my pocket.

I dunno. According to this article, the Zune only had 1% of the US MP3 player market through May of 2010. But the reviews of the Zune HD are extremely positive and it has some very appealing features (notably a HD radio receiver) and a subscription music service. The price is quite attractive at $100.00 less than the iPod touch.

Countering that is that Microsoft is probably subsidizing the sales to get to that price point (c.f. XBox), so they’re probably not making much, if any, money on each one. So you have to wonder how long they’re going to keep supporting a product that may or may not bring them an actual profit. (MS probably makes a bit of cash from the $15.00/month music subscription service.) Microsoft has orphaned a few technologies, including the recent Kin and most cogently, their former music licensing scheme, PlaysForSure. But they desperately want to be in this space, and they’ve got loads of cash to keep competing with.

There are rumors of a Windows Phone 7 Zune, possibly a precursor to a Zune phone. So the future of the Zune may be tied into Windows 7 which so far has gotten good reviews, but not raves.

So, what’s the bottom line? If you want a touch MP3 player and you’re not an Apple fan, you could do far worse.

“Catching On” is probably a bit optimistic, since Zunes aren’t available outside the US/Canada and you can get iPods pretty much anywhere they have computers and the internet.

More importantly, Zunes have been around for something like five years now, and they’re still US/Canada only. I’m frankly surprised Microsoft keep bothering- and I say this as someone who’s not a fan of Apple.

I recently bought a Zune HD when my old iRiver bit the dust and I like it very much. It’s easy to get around the menus, it does radio, video, wifi , and will hold many, many pictures of my adorable nephew that I can use to bore people. Battery life is fantastic. I spent a little extra for some artwork and engraving on the back. Best of all it’s purple.

They do this with the X-Box too; they subsidize a lot of its cost in order to stay competitive. I’m not even sure these fronts are profitable for Microsoft; they just want their name in as many areas of technology as they possibly can.

Nintendo, Sony and Microsoft are all losing money on each system that they sell. That doesn’t stop the Xbox, Wii and PS3 from being money-printers.

The Xbox 360 is now hugely profitable for Microsoft. The tiny piece of every Call of Duty: Black Ops sale has to be a hefty chunk of change alone.

Nintendo never lost a cent on the Wii. The system (along with the DS) has been so profitable for Nintendo that the company is bigger than Sony today.

It’s also important to note that the PS3 and Xbox 360 both became profitable to sell a long time ago.

I was wrong about the Wii. They’re the only system making a profit at a hefty $6 per system sold. The other two systems are losing money. That’s from December '08. If you have a more recent cite I’d love to see it.

After some more searching, Microsoft is making a turnover, too.

I’m going to cling to the part I am correct about.

Sony, however, continues to lose money per system sold.

Here they say Sony’s losing $18 bucks per system sold.

Even with Nintendo making a $6 profit, the point of my post remains: The companies don’t make their money off of the systems. They’re getting rich off the software. When you buy a system there’s a good chance you’re getting it for around the exact price it took for them to manufacture it.

The reason they “keep bothering” should be obvious–these devices (computers you can put in your pocket) are the future. Microsoft can either get out of the software business and liquidate itself, or it can try to keep up.

I have a Zune HD and I love it. It’s easy to navigate, which is helpful if I want to change songs as I drive – I just slide my finger across the screen and let it go. The software is far easier to navigate than iTunes, as well. And I like the HD radio feature since my local NPR station now has an HD station that has programming that I like instead of the usual classical stuff. The apps are actually useful and the games are kinda fun as time-killers.

Maybe they’re doing like the original Xbox just getting their name out there. I don’t think the original Xbox ever made a profit and lost an insane amount of money. That got their foot in the door and they followed up with the 360. That was the plan they knew going in that they were going to lose a buttload of money, but they had it to lose it being Microsoft

Sony makes money on the PS3 now.

The Zune might be ok and the software may be better than iTunes, but what about the app store? The Apple App Store is smooth and has 100,000+ apps, with a sizable percentage free.

I fail to see how an MP3 player that’s been on the market for five years, is only available in two countries, and has a 1% market share is “the future”.

Even from a “Brand Presence” point of view it’s still pointless- lots of people bought the Xbox and from a public perception point of view it was definitely a success. But this Zune thing? As much as I hate to say it, I think they should give up. Apple’s won. Anyone that wants a decent MP3 player that isn’t an iPod is going to get a Sony or a Creative. I just don’t see- from any viewpoint- why Microsoft are continuing to pump money into something that’s just not working by any reasonable person’s definition.

I see Lemur’s point. I think within another generation or two, they’ll still play mp3s, but they won’t be called mp3 players anymore. Once they’re more for video/apps/games/websurfing, it’s anyone’s game again, and all the better for Microsoft to have a launching pad if they want to compete. I saw another ZuneHD today, and I’ll be surprised if the 1% figure is still accurate after Christmas.

Zunes are in a weird place I think. Of the 5 or 6 people I’ve seen with Zunes, they all loved them and at least 4 had owned ipods before they got zunes. Yet to a person every time someone talks about buying a new mp3 player and I ask what they’re looking at and if they’re looking at zunes, they always say, “I dunno. Are they any good?”

We’re not talking about mp3 players. That’s a dead end market. I’m talking about what people tend to call “smartphones”, except without the phone. Like the iPod touch. Of course, once you’ve got one of these devices, it makes sense to stuff a phone into too, so you don’t have to carry two devices.

The iPod/iPhone is default device, because Apple got there first with a device that really worked well. But now that the market is proven, are they really going to keep their dominance over the next 5 years or 10 years?

In 15 years or so, people are going to stop buying “computers”. They’ll have a phone/device that will do everything they currently use their computer for, and if they want a full size keyboard or display or hard drive, they’ll just plug it (or wirelessly plug it) into their phone. Or maybe you’re the kind of guy who always wants something bigger, and your device will be more like an iPad/Kindle.

But the paradigm of having a computer on your desk at home, a computer on your desk at the office, and a phone in your pocket will be busted. You’ll have a core device (of whatever form factor you prefer) that you carry around all the time, and various peripherals that can enhance the value of that device that you can use when you want to.

Oh, that’s absurd.
There will be a place for desktop machines for the foreseeable future. There’s just no way that a pocket-sized device is going to match the power and storage capabilities of a desktop, and it would be pointless to try. They are designed for different purposes.

Now, “cloud computing” accessible by a portable device, might be a success.

Not absurd at all. Now that we can all have toaster ovens, nobody buys just toasters or ovens any more! What would be the point, what with them each taking up valuable kitchen space?

yeah.