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Is Zune DOA?

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by Danny Kaey on October 02 '06

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Danny Kaey takes a look at Microsoft's $249 iPod competitor, the Zune. Is the Zune ready for the big time and what does this mean for hi-fi? Keep reading to find out...

Microsoft is at it again! (and again, and again, again, again, again, again, a----------)

So the smart folks at Microsoft just announced November 14th as their equivalent of “D-Day” or in other words, the day iTunes “finally” (no really, we mean it this time for sure!) meets its match. No sooner was the herculean effort announced, did I catch my keyboard (another Microsoft product), opened up my MS Word 2007 (Beta, and of course, another Microsoft product) running of course on Vista (post RC1 build, yet another Microsoft product) and began typing these words. What’s the hoopla all about? Well of course, Zune! (heh, yep, you guessed it, another Microsoft product) In case you missed it, well, this being Microsoft I guess you actually could have (after all marketing brilliance (or paralysis with Microsoft) have always been the classic galactic smarts of Apple, or one Steve Jobs of San Jose, CA).

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Reality has a troubling way of kicking in every now and then; clearly, as is the case with Apple’s truly phenomenal success of iPod and its entire ecosystem, reality has reared its ugly head one too many times with the powers that be at Microsoft. For years, denial in the form of “Play’s For Sure” has taken its final toll (we are really, really, really, serious about this now!) – whereas Apple of course has a simple yet effective culture for their iPod, a gazillion manufacturers thought they would easily outclass, outgun and outsmart Apple by offering more features, more bang for your buck, more everything, with a myriad of players and software, all engulfed by Microsoft’s “Play’s For Sure” campaign.

So PFS in short was supposed to guarantee full compatibility between Microsoft’s Windows Media Player and all these lovely music players from Toshiba, Samsung, etc. Adding to the complexity is the fact that unlike iTunes (which is the only DRM protected store format that Apple allows it’s iPod to interface with), there are a good half dozen or so online stores that are supposed to be compatible with all these players and of course Microsoft’s own WMP.

The sad truth however, is that much the same problems that affect the Windows ecosystem (ie. a million cooks cooking up different meals) have similar issues on “Play’s For Sure”. Different rights models plague the different stores; Napster allows you to copy track X, Y times; other stores allow track X to be copied Z times, so on and so forth. Most importantly, the ‘net is filled with forums where angry customers are voicing their dilemmas of not being able to upload music files on their newly purchased (iPod)-killer player ZXY, etc.

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About a year ago, Microsoft, in yet another frugal attempt to put a shoe in front of Apple, teamed up with MTV to create “URGE” as in I have the URGE to go to the bathroom, ‘cause all of this smells too much like shyte. URGE was touted as THE defining moment in the history of attempting to dethrone Apple from its Numero Uno spot. If Microsoft would only have asked me for my opinion, no doubt many millions of $ could have been saved, most importantly, I would have been several millions $ wealthier. At any event, URGE went really fast really nowhere, and while iTunes commands a whopping 75% market share, all other competitors amount to little of the multibillion dollar music download pie. That would be what, 40-Love Apple, or Point, Set & Match.

Figuring that reportedly hundreds of millions of dollars where spent advertising, promoting and spreading the word on URGE, this amounts to about the 5th Enron style scandal Microsoft has been left unaccounted for. Around the same time that URGE was shaping up, my super secret sources at Microsoft where telling me of yet another “Grand” and coy plan to finally, once and for all, Mordor go to hell, Peace on Earth, put a sock on Apple. No matter how hard I tried, my sources remained silent about this super secret project, rumored to cost more than 3 trips to the Moon and back, yet assured me that this was so special that just the thought of it all URGE’d all of them to go to the bathroom more than once on the hour, every hour.

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Finally, as time drew closer to end, ZUNE was announced. Say what? ZUNE? Ummm… Sir, excuse me please, what is Zune? Well, Zune is Microsoft’s final (well, nothing is final, but hey, I stopped counting after 10) answer to Apple’s iPod dominance. Featuring a retail price of $249, a 3 inch screen (vertical or horizontal layout), a 30gb hard disk, a built in FM tuner and Wi-Fi capabilities (though no doubt judicious use of Wi-Fi will be encouraged otherwise look for around 3 minutes of battery life), the system specs and pricing sound pretty decent.

Decent, that is, until you discover Microsoft typical inconsistencies, blunders and what will surely amount to being the 6th Enron style fiasco. Let’s forget about the most obvious of shortfalls, color options: they would be white, brown and black – brown in particular would have worked so well with the whole URGE campaign, as in at least you know what to look forward to next time you get the URGE, if it weren’t for the dumb fact that (guess what?!) Zune is actually NOT compatible with URGE! Care for more brown URGE?

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That’s right folks, not only will Zune not work with the last great Microsoft/MTV project, it also isn’t even compatible to Microsoft’s own Windows Media Player, which, oh by the way, Microsoft is touting as the end-all be-all music management software you need. If this isn’t gross malice and homicidal negligence, I don’t know what would be. Clearly the people in charge of project Fiasco errr… Zune have no clue what they are up to, least of which they apparently overlooked or bothered to check with the other Microsoft folks who run “Play’s For Sure”. I mean I can see how they will sell exactly all of 4 Zune players by year’s end.

I have to admit, watching Microsoft stumble all over with their 5th Enron style disaster that his Windows Vista over the last 4 years, I didn’t think they could actually muck things up worse – it’s Zune to the rescue, what were you thinking Danny? Let’s review some further downfalls of Zune, shall we? So there’s this ingenious idea of having Wi-Fi capabilities to “share” your music with anyone (of course only “anyone” who also happens to have a Zune player, otherwise you are out of luck) – but wait, we are talking about a Microsoft product, so there must be some crap somewhere: and so the truth is that while yes, you’ll be able to share tracks with other Zune friends, it of course depends on the track you plan to share, moreover, your Zune pal can only play that shared track 3 times for a total of up to 3 days! My that’s just brilliant!

Then of course there’s the dreaded battery life – you see, people have been haunting and bullying Apple for years as to why there aren’t any Wi-Fi capabilities in the iPod, the answer of course is that typically Apple only releases products that actually make sense and are usable by the masses. My guess is that the minute you flip on the network switch on Zune, your batter meter will drain with about the same force as Arnold’s gas gauge on his Hummer. Throw in video playback (another notorious battery sucker) and pretty soon you have to answer to massive consumer rage of why battery life in their shiny new (and brown) Zune player amounts to nothing more than 20 minutes of fun in the sun.

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Lastly, there’s the software interface issue: for years MS has been tooting the horn of their Windows Media Player (now up to 11); next it was all supposedly fully compatible with “Play’s For Sure”; then of course came URGE; finally, the coup de jour is Zune and its very own “Zune Marketplace” software, yet another piece of bloat-ware that Microsoft wants me to install on my PeeCee, which (lets just remind ourselves once again) perfectly replicates what MS already had invested in its previous infrastructure that is WMP/URGE/Play’s For Sure. I suspect that these guys are smoking something highly toxic in Redmond, perhaps to drown out the sorrows of losing out to OSX, iPod and iTunes year after year after year.

At any event, my predication is that (what? You haven’t guessed it?) Zune will hit rock bottom pretty much Nov. 14th at around 5:43 pm the day of the launch. With Apple’s latest salvo’s just launched a few weeks back, the rumored true Video iPod in the works for a Q1 launch of 2007, yet another rumored iPod mobile phone in the works for Q1 of 2007, I honestly don’t see much hope for Zune going anywhere but south.

Comments

Problems: * Can't sync to your computer via WiFi * Wireless music sharing limited by DRM * Click wheels is actually just four buttons Apparently they've learned nothing. But the truly pathetic thing about all of this? The thing that says that either they didn't pull out all the stops for it, or that if they did, well that's just completely sad? It's just a rebadged Toshiba Gigabeat. They couldn't even be troubled to make a brand new player.
Danny: I thoroughly enjoyed your harangue of Microsoft's answer to vaporware, maybe we can call this "boat-anchorware?" Though I expect the Zune to be bug riddled I expect it to be round 666 of wrestling yet another Microsoft product to do what I want it to do. I hope you are right that the Zune will fail, but I think you are wrong with regard to its financial success. Look at the XBox and the near billions spent on making that viable. Microsoft's propaganda machinery, along with its gazillions of deposits will overcome consumer's perceived need to have a functional, good sounding product that does what they want it to do. Yet again consumers will be subject to Microsoft's Department of Disinformation and Obfuscation; the poor fools who line up behind Microsoft will once again chafe at the bit to get the next "free" download to make their player even better, until it's almost half as good as the IPOD. Ultimately, much to my disappointment, I believe we'll all be eating brown Zunes as the IPOD generation shrinks into its niche.
Investors in MSFT should start dumping their shares ZUNE - I mean, SOON. Microsoft still doesn't get it, and no one else in the competitive ring ever seems to have gotten it. Apple created an entire culture around iPod, and with their iPhone slated to be released next year via Cingular (at first, then others) they will ALREADY have eaten Microsoft's lunch AGAIN because no one is going to give a rat's ass about ZUNE even if it outclasses iPod by a zillion percent. Add to that whatver nextgen iPod video thingamabob is in the works, and downloadable movies via iTunes (and already a decent selection of TV shows available), and you've got a tremendous amount of inertia to overcome before you can even try to pick away at Apple's market. It would be like Jersey City trying to out-Manhattan the great city of Manhatan. Good luck. You'll need it.
Just don't let Ken Kessler hear you saying all that happy Apple stuff.
Not that I don't love my ipod.
So nobody likes the Zune's draconian and retarded DRM implementations nor its wimpy HD/battery life. Wow, big surprise there. Wanna try something that really "plays for sure"? Uh... how about turntables + vinyl? Clean it up, drop needle, play. Simple as that. There you go, finally something that "just works" every time :D Can't wait to see this thing turn from Zune to Zunk faster than Dubya's approval rating. And the brown color. Don't forget the brown color. How fitting.
Microsoft has traditionally been terrible at hardware. The Xbox is a fluke in a long history of failure. The fact that the Zune is a closed platform like the iPod is the main reason I have no interest. Aside from the scatalogical associations, I think brown is a fine color for a player. I'm totally sick of white and plastic coated colors. The reason a lot of devices don't support wi-fi is because as you touched on, the 802.11 spec is a realy power hungry beast, and putting it in a phone or player will seriously eat the battery. That Zune did it is commendable, but the draconian implementation makes the whole kewl point of it moot.
All I want is a flash-mem-based player that can handle FLAC level 8. Is that too much to ask?
"Investors in MSFT should start dumping their shares ZUNE - I mean, SOON." Riiggght. Microsoft isn't afraid to try again, and again, and again.. Because they can. Even if this product fails miserably, it won't significantly impact MS's bottom line or market cap.
Yo JH, I'm right with you re: vinyl, but my portable record player dosen't handle jogging very well. (Sorry, have to laugh. I can't remember what jogging feels like.) The ipod is a closed system only for fools buying shitty, compressed files online. Who here is doing that I wonder? I rip CDs and LPs and listen to them on the 'pod uncompressed. Sounds pretty good that way. Oh, and Apple lossless? Not.
COMPRESSION=OPPRESSION!
Gosh, majnun, why'd you have to bring Jersey City into this?
Jersey City's plenty nice, Stephen ... it's just never going to be Manhattan. Like Microsoft, though, it has a temptingly close view of Manhattan that sometimes its denizens imagine that they will one day take become Manhattan. Did you see Steve Jobs' Apple Event video introucing the new iPods, the new iTunes, and the upcoming iTV? (hint:iTV will stream A/V media wirelessly to your TV/Entertainent system) - Apple is so far ahead of the curve on integrating computers with our personal lifestyles that MSFT will really be left holding the bag. And while shareholders in MSFT might not have much to worry about short term. Long term, they will have lost the battle for integration into the home. As Steve Jobs put it, Apple is in your den, in your living room, in your car, in your pocket ... Microsoft is in your office.
Yes, Zune is Toshiba and Microsoft love child. Unfortunately, You cannot underestimate Microsoft clout in the market. The over 90 % in Windows market share is still there. I love Apple and the iPod as made me rediscover music again. Now only if Apple made an audiophile iPod with digital optical out... :-)
"Apple is in your den, in your living room, in your car, in your pocket" Steve Jobs can keep dreaming. The way you (and other mac fans) talk, you'd think apple would have even a 25% home pc market share. They don't. They won't. Reality: http://marketshare.hitslink.com/report.aspx?qprid=5
@ anaon market share - while it would be great for Apple to gain significant market share, it really doesn't matter that much. The problem with Microsoft is their notoriety in releasing product that underperforms, is under engineered and / or poorly designed and takes up way too much consumer interaction to properly work (if it ever actually does). I remember buying a "Media Center PC" in 2004 and thought how absolutley silly it really was (and sadly, still is). At the end of the day people buy that which makes sense for them and is simple and easy to use. The fact that Apple now has shifted to a universally accepted platform, the X86 cpu, will only help them gain traction.
Danny: All really fine points, but... A little traction is different than "Apple is in your den, in your living room, in your car, in your pocket." No? At the end of the day people will buy on cost, availability of software, and what they have at school and work. This ain't Apple. Disagree? Okay. The odds are heavily stacked against Apple gaining any more than "traction."
@ anon Apple is in your car - last I checked most major automanufacturers do have iPod connectors and more specifically, iPod docking stations for your favorite iPod. Apple will no doubt be in your living room with iTV (or whatever they decide to call it), due to its simplicity and "it just works" factor. At the end of the day people by "benefits" not features. Regarding availability of software you are beating the wrong horse - with X86/Intel/AMD virtualization technology, you can now run *ANY* X86 compatible app on *ANY* Intel based Mac. Last I checked you still can not run OSX on PeeCee's unless they are Apple computers.
So, I see by that Marketwatch that Apples share of the market has dropped almost percent back down to below 4%. So they would need more than just 'traction' to get back marketshare. So far I haven't seen anything from iTV that will make Jenny Q Public spend the money required to get in the game for it. There are services out now that allow you to download movies and watch them later with the Media PC and other platforms and none of those buisnesses are turning a profit. The next big thing will probably be more like the PS3 or a revised version of the new XBox that does more computer like functions. Buyers will plunk down the money for the gaming experience and stay for the other options on those players. But not many consumers are going to plunk down the money just to buy the hardware that runs iTV and iTomb. Also the cable companies newer services from their Tivo-clones can compete head to head with anything Apple decides to do in a very short amount of time. When the iPod came out there had been MP3 players on the market for about 5 years, without much market share. The connecting software and the players were not as easy to use, and of course there was no great way to buy tunes online. When Apple stepped in, they took a great idea and succeeded and created a new market. With TV and Movies, no such gap exists. Any child can use Tivo. Purchasing movies on it is not a stretch. Cable boxes are similarly easy to use. Where is the gap they need to fill? It's not really there.
MARKET SHARE: What the PC-bots fail to notice is the most important market share number: iPod accounts for over 75% of the portable audio market. They have created a culture around the iPod and they will continue to cultivate the iPod users as MAC becomes the defacto home entertainment computer standard. Even if you have a PC, iPod, iTunes, and even iTV will work ... cross platform operability will move Mac deeper into the bedrock. over 75% of the portable audio market. Keep your eye on the ball. When you talk about installed Wintel PC's you are completely missing the point. It's all about personal electronics.
Point one - iTV won't work. People get their media devices from the cable and satelite providers, and will for the foreseeable future. Point two - it is quite a leap of logic to say that past dominance in one niche market will equal dominance in other markets in the future. History tells us that this just isn't so. Point three - Apple's dominance is over one niche market. MS's dominance is over many broad markets. Apple-bots like you, majnun, fail to keep your eye on reality, rather than the proverbial ball. If Apple's is the market leader, or even close, in any market other than portable audio in 5 years, I'll eat my hat. In fact, if I were a betting man, I'd say that Apple only has market share to LOSE in the portable audio market... and will likely maintain the status quo in all others.
Anon - you sound more like your praying for what you're saying to be true, but it's not. Apple has DEFINED the personal electronics space and has set the pace and tone. Point One: iTV can work because - together with a PC or Mac - it becomes a wireless extension of a full AV media server, and that's powerful MoJo. Wireless entertainment streaming to your TV. Oh yeah ... no one wants that when they can have TiVo. Oooh. TiVo. As if their Mac can't be a DVR also. Besides ... isn't Steve Jobs buying TiVo? I seem to recall something about that. Point Two: It's is not a leap of logic, it is seeing the forest AND the trees togther, The big picture. Apple has defined the space, things are measured in Apple-defined units now. iPod is not just a device, not just an integrated media service, it is its own culture and to extend the brand's cult identity into other reaches of the home will not take anywhere NEAR as much effort as it would to get MSFT's rolling because Apple already has momentum in the personal electronics space. It's a moving target. How much market space does Microsoft occupy in the personal electronics realm? X-Box. Sony's about to eat X-Box's lunch, too. MSFT's dominance in many markets makes it less capable of establishing its home and personal electronics cachet - Apple has beaten then to the punch and eaten their lunch in this regard, has a huge head start and a very carefully cultivated brand. Apple is the brand, the brand is the culture, the culture is the key : read The Tipping Point. Culturally speaking MSFT is nerd-ware, and Apple is pushing that issue harder than Nancy Pelosi is jumping on the Mark Foley scandal. http://movies.apple.com/movies/us/apple/getamac_ads1/better_480x376.mov Apple's making some very interesting and profitable alignments, too - the Nike iPod system sold over 450,000 units in its first few months. http://www.apple.com/ipod/nike/ Want to go for a drive? Pop your iPod in the car: http://www.apple.com/ipod/carintegration.html WINDOWS PCs ARE YOUR FATHER'S OLDSMOBILE ... but iPods fit seamlessly into your Ferrari. Apple can now run Windows, too ... just boot up to Windows and you're off. The machine is universal. SO: Get prepared to eat your hat. Apple's marketing and market penetration are all centered around your life outside of work, while MSFT is what you do at work. It's Windows. It's Office. It's WORK. See ... we're not Apple-bots. Most of us are converts from the dull, buggy world of Windows .. sick of the failures in the OS, sick of the viruses, sick of the lack of vision. Microsoft users are bots because they tow the party line and get nothing in return. Your address book is your investment, stuck in Outlook and Entourage and Powerpoint. Woo hoo! Let's see that Powerpoint demo again! Man, I creamed my PANTS! Windows users are little catepillars blindly crawling along dry tree trunks imagining that the whole world must be that gray. Some lucky ones discover some nice tasty colorful leaves, chow down, curl up, and - KAPOW! - butterfly. The world as viewed through the eyes of an Apple user has more dimension, greater hope, beauty, depth. Apple frees your soul. Apple is love. Apple is your destiny. Join us. Join us. Join us.
Well I wrote a long response to anon but it didn't get posted. Suffice it to say simply that Apple has drawn a line in the sand and successfully identified MSFT as something you do at WORK and MAC as something you do everywhere else. The marketing is working. MSFT is nerd-ware, it's your father's Oldsmobile, it is Outlook and Word and Powerpoint and Entourage. Bot-ware. Apple has created a strong, readily identifiable subculture around its iPod, it has defined the personal electronics market via the integration of iPod and iTunes, and as such it makes the rules for over 75% of the market. Keep in mind that this INCLUDES PC users installing iTunes. Mac loads Windows, too. Just in case you need some. But the real ball to keep your eye on is what Apple is doing to define the space that everyone else has to come and try to play within. To even TRY to play in this space demands comparison to iPod and iTunes. Zune? C'Mon, dude ... it won't get anywhere ever because MSFT doesn't have the Mac Cachet. MSFT is institution, green-glowing flourescent lights flooding the speckled white linoleum of an old hospital. Apple is a rave with crazy multicolor lightshows, dance music, and hip young 20-somethings flaunting their belly rings and Deisel jeans. You may not like it, it may bristle your quills and get to to whip up a spreadsheet in Excel just to prove me wrong ... but you won't, because I'm right. By successfully defining Windows/PCs as what you use when you're NOT having fun they have defined a niche. They have reduced MSFT to the status of faded bronze K-Car while they whip around town as a colorful new Volkswagon Beetle, or Mini Cooper, or Ferrari, etc. And it is the cultivation of their already-installed crowd that will help them to define the home electronics playing field. In 2005 Apple sold one iPod every second! To-date they have sold over 50 million iPods (78% marketshare) and over 1 billion iTunes (87% marketshare) and 40% of new cars sold in the USA will have direct iPod connection. Lastly, and very interesting to me because it really indicates the penetration into pop-culture: It would appear that CBS is developing a sitcom called "Genius Bar" - a title taken from the help desks in the Mac Stores found in malls and in freestanding locations. "... the project explores the interactions between people who work at a place similar to the Genius Bar at the Apple stores and the cool, hip and beautiful employees at a nearby Abercrombie & Fitch-type store." You write "Apple's dominance is over one niche market" - as if by reducing the pop-culture market to "niche" you are able to magically diminish its impact and future implications. But you can't diminish something as huge as it is ... this "niche" is over 50 million strong, buys over a billion iTunes when the rest of the music industry seems to be lagging, buy Nike shoes with iPod integration, buys cars with direct iPod dockability, and is the defining pop-culture icon of the 21st century. No ... niche doesn't necessarily mean small and weak. Niche in this case means all of pop culture. And MSFT? Nerd-Ware.
Wow! All of Pop Culture? That's really denigrating to modern culture. If a little eletronic thingie can define a culture, it's in really bad shape ;-) But seriously, I think your post Majnun is really talking about brand perception. And I think you have optimistically defined the brand perception between the two rivals well. Now is brand perception the whole story? I think those Marketwatch statistics are a bit more sobering. With this great iPod revolution going on right now, Apples share of the OS market is shrinking. What is up with that? Is that exapnsion into new markets? Again, I have to say that the iPod was a great success, and it is rare for a company to create a new market out of nothing. Which is what Steve Jobs did. Kudos for that. It's marketing genius. But can he do it in a market that is already deeply entrenched, even though it is evolving? The TV/Video Entertainment industry? It's just not the same kind of environment, and there are so many barriers to building market share. In a way you could draw a comparison between the iPod in the new millenium and AOL a decade earlier. AOL has immense success because they made is easy and 'safe' for unskilled computer users to go online through intense marketing of brand. They did tremendously well. Well enough to buy Time Warner! Then their day in the sun was eclipsed by other factors as the market matured. The iPod came onto the scene where there were other MP3 players and online music stores, though they werent' very good. And Apple made that market their own and developed it through intense brand campaigns, into a huge business. But now that the market has matured and is evolving (to video and TV) can Apple keep that position? All of a sudden it has real competition - Time Warner, Comcast, Verizon, Tivo, Cox, MTV etc. That's a highly competitive landscape. Good luck with that. As to the defining of Apple for the home and MS for work. Who did that precisely? Where can I find that in writing? It's not in the stastics. I recommended Mac Minis to a couple of friends recently that wanted to upgrade their very old PCs. They were not sophisitcated users, and a Mac Mini would have done the job for them really well. Well, after looking at the market, they decided on PCs. Why? Cost. The Mac would have cost about 50% more (when they tallied all the peripherals they would have to buy to get it up and running). When a company spends so much on advertising and marketing, they have to pay for that somehow.
Hi John, I don't think it is denigrating to modern culture - it is simply about iconic identification. For something interesting, I suggest checking out these numbers I pulled from Macrumors.com: Wednesday April 19, 2006 09:51 PM EST Posted by arn Apple reported on their Q2 2006 Financial Results and provided a webcast conference call. Here are relevant notes from that conference call: Mac business 50% of quarterly revenue. - Up 4% from the same quarter last year - Pleased with Intel transition progress, and "solidly on track" to complete the Intel transition by the end of calendar 2006. - "Pause" in sales due to transition anticipation. Reasons listed include: delays due to shipping delays on MacBook Pro, users awaiting Universal Apps and users awaiting upcoming Intel Macs. - 1,112,000 Macs sold during March; $1.572 Billion in Revenue. - 614,000 Desktop Macs ($833 million revenue) - 498,000 Portable Macs ($739 million revenue) Music business 50% of quarterly revenue - Up 79% year over year - Over 50 million iPods sold cumulatively - 8,526,000 iPods sold - Over 1 billion iTunes Songs sold. 87% marketshare. - iTunes: 2.9 million songs, 60,000 podcasts, 9000 music videos, 70+ television programs - iPod: 78% of MP3 player marketshare (up from 71% in December) in U.S. - 2000+ iPod Accessories - 40% of New Cars sold in U.S. will offer direct iPod integration Retail - $636 Million in revenue - 50% of Macs sold were "new to Mac" - 141 Stores Open by end of Quarter Outlook - Still expect a pause in demand in Mac business due to transition - Happy with the Intel transition - "Very excited about the products in our pipeline" NEXT: Let's check out some numbers. MSFT: Market Cap: $280.93 Billion 52 week range: $21.4599 to $28.38 AAPL: Market Cap: $63.83 Billion 52 week range: $47.87 to 86.40. Traded in 1996 at about $6-n-change/share (split adjusted) and has grown over the past ten years to trade at a whopping $28/share ... let's say net growth of 430% over 10 years. MSFT is trading at nearly half of what it was trading at in 2000. So while MSFT has considerable market cap, it has showed little to no improvement over the last year (August of '05 had it trading in the same range it is trading this afternoon). AAPL on the other hand may not have the market cap, but it has market momentum and positive growth ... since 1996 when it was trading at roughly $5/share (split-adjusted) to now, when it is trading at about $75/share, AAPL has proved that it can create consistent momentum and build on prior successes. Net growth of 1500% over the past ten years. Academic rhetorical question: Which stock would you rather invested in from 1996 until now? As for defining Apple for the home, MSFT for work ... who deined it is Apple through their marketing and the market for buying it over and over again. Apple is doing an amazing job painting MSFT as a frumpy accountant to Apple's young, energetic, "with it" pop culture maven. It just IS, and it contiues to unfold. 1500% growth in 10 years - that's a statistic, too.
Hi John, I don't think it is denigrating to modern culture - it is simply about iconic identification. For something interesting, I suggest checking out these numbers I pulled from Macrumors.com: Wednesday April 19, 2006 09:51 PM EST Posted by arn Apple reported on their Q2 2006 Financial Results and provided a webcast conference call. Here are relevant notes from that conference call: Mac business 50% of quarterly revenue. - Up 4% from the same quarter last year - Pleased with Intel transition progress, and "solidly on track" to complete the Intel transition by the end of calendar 2006. - "Pause" in sales due to transition anticipation. Reasons listed include: delays due to shipping delays on MacBook Pro, users awaiting Universal Apps and users awaiting upcoming Intel Macs. - 1,112,000 Macs sold during March; $1.572 Billion in Revenue. - 614,000 Desktop Macs ($833 million revenue) - 498,000 Portable Macs ($739 million revenue) Music business 50% of quarterly revenue - Up 79% year over year - Over 50 million iPods sold cumulatively - 8,526,000 iPods sold - Over 1 billion iTunes Songs sold. 87% marketshare. - iTunes: 2.9 million songs, 60,000 podcasts, 9000 music videos, 70+ television programs - iPod: 78% of MP3 player marketshare (up from 71% in December) in U.S. - 2000+ iPod Accessories - 40% of New Cars sold in U.S. will offer direct iPod integration Retail - $636 Million in revenue - 50% of Macs sold were "new to Mac" - 141 Stores Open by end of Quarter Outlook - Still expect a pause in demand in Mac business due to transition - Happy with the Intel transition - "Very excited about the products in our pipeline" NEXT: Let's check out some numbers. MSFT: Market Cap: $280.93 Billion 52 week range: $21.4599 to $28.38 AAPL: Market Cap: $63.83 Billion 52 week range: $47.87 to 86.40. MSFT Traded in 1996 at about $6-n-change/share (split adjusted) and has grown over the past ten years to trade at a whopping $28/share ... let's say net growth of 430% over 10 years. MSFT is trading at nearly half of what it was trading at in 2000. So while MSFT has considerable market cap, it has showed little to no improvement over the last year (August of '05 had it trading in the same range it is trading this afternoon). AAPL on the other hand may not have the market cap, but it has market momentum and positive growth ... since 1996 when it was trading at roughly $5/share (split-adjusted) to now, when it is trading at about $75/share, AAPL has proved that it can create consistent momentum and build on prior successes. Net growth of 1500% over the past ten years. Academic rhetorical question: Which stock would you rather invested in from 1996 until now? As for defining Apple for the home, MSFT for work ... who deined it is Apple through their marketing and the market for buying it over and over again. Apple is doing an amazing job painting MSFT as a frumpy accountant to Apple's young, energetic, "with it" pop culture maven. It just IS, and it contiues to unfold. 1500% growth in 10 years - that's a statistic, too.
Apples to Oranges. You are having a discussion of Apple vs. MS. I am having a discussion of Apple plans for expansion in a new market. I don't think MS has a chance in that market either. At least not with their current strategies. The ones who will rule it will be traditional telcos/entertainment conglomerates, unless something drastic happens. Personally, I'm hoping a non-evil artist and consumer friendly platform arises. But I won't hold my breath.
Very funny. Apples to cough drops more like it. BUT - Steve Jobs is making the necessary alignments and acquisitions to make Apple extremely competitive. With Boot Camp, Apple also becomes a Wintel machine ... it is no longer a hardware issue per se. Apple is basically saying "I can do what i can do AND I can do what you can do ... but you can't do what i can do" MSFT isn't a hardware company. Xbox aside, nobody thinks "hardware" when they think MSFT. MSFT is at loggerheads with Sony - that will take time and money. Apple stands outside the fracas, planning and acquiring, developing with an eye toward making sure that Apple has a lock on electronics for popular culture. Traditional Telcos need companies like Apple to deliver the consumer. Deals will be made. Hats will bea eaten. .
Wow. I don't think I've ever seen a bigger Apple fanboi. The stars seem to be magically aligned for Apple, suddenly. All because of the ipod and a few television ads that only Apple fans seem to notice? I don't think so.
While you guys battle it out, I'll stick with my preferred portable player
John wrote: " can Apple keep that position? All of a sudden it has real competition - Time Warner, Comcast, Verizon, Tivo, Cox, MTV etc." I don't think Apple is necessarily competing with these companies with iTV. First off, Time Warner and MTV are content providers, so in fact it will be their content that people will be buying on iTunes and watching on iTV (potentially). As far as the cable companies, until you can download YouTube and Google video and bittorrent files over your Tivo or PVR, there will be a need for something like the iTV. I think lots of people will want an easy way to watch the hundreds of gigs of (mostly pirated) content on their HDDs on their TVs, in their living rooms. Also, lets face it, most people will use the iTV to watch all that "adult content" they've collected online. This won't get mentioned in anyone's marketing brochures, but it has to be a huge factor in selling devices like this. Also, its unfair to imply that the iPod is only successful because of marketing. How many failed product launches have we witnessed in our lifetime where some huge company tried to flog some crappy product with a marketing budget larger than the GDP of some countries? The iPod took root with a huge grass-roots following before the marketing campaigns became ubiquitous. The fact is, the early-adopters got so excited and passionate about their iPods, you couldn't help but take notice. It succeeded because, like it or not, it is a great product. I find it actually somewhat encouraging that a device succeeded because of its merits, not because of hyperbole. Maybe those merits aren't audiophile-approved, but most of the world ain't audiophiles. Will the Zune provide the same "awesome" factor when you hold it in your hand? Maybe, but I'm not holding my breath. Microsoft still thinks it can play and win the feature game, but Apple seems to understand that it is the "look and feel" and sexiness factors that make devices like this succesful these days.
Wally Wally Wally... 10 years, 1500% growth, and the single-most identifiable pop-culture personal electronics icon in history (does ANYONE ever bother to mention Walkman anymore???) with the most significant single-brand installed base of any consumer electronic device in history and you have the audacity to say "suddenly" ? Once a Borg always a Borg, it seems.
my background is sales... I had the fortunes of being mentored by some truly gifted sales people over the past 15 years... anyway - what most people don't understand is that most people buy products based on a *benefit* factor, NOT *feature* factor, ie. how do the features of product A provide a benefit for me? This model explains the amazing success of Apple's iPod - the features it has (and had from model 1) are implemented in such a way that they immediatley benefit the consumer. Apple never made bones about the fact that there are many other players around with far greater feature sets; however, these features alone do not guarantee any success. Let's look at two major features of Zune: 1. video playback great to see Zune has these - however: video playback taxes batteries rather harshly - look at the last generation iPod: you had a battery life of about 3-4 hours when watching videos. The recently released model bumped this up dramatically to about 7 hours. 2. networking ability/WiFi another great feature of Zune - however: the implementation of it through draconian rights management regulations is absolutley silly! You can share only songs that MS let's you with a friend for 3 plays during a 3 day time period... how ridiculous is that?! Most importantly - I am absolutley positive that your battery life will drain faster then the gas gauge on your hummer, in particular when you start using video playback on top of everything. These are perfect examples of how features which are not well implemented lead to miserable feature/benefit ratios for the consumer. Add to that the fact that consumers (who complain about the "closed" iTunes sytem - which it really isn't in the sense that most understand it) will not understand why they can't use their freshly installed Windows Media Player 11, Rhapsody, Real or any other music management software and you will soon see how many consumers will leave Zune by the wayside...
Danny ... on iTunes "closed" system and not being able to share downloaded files from iTunes: I decided one day to just dump all my purchased music to CDR on my iMac G5. Then I reloaded them back into iTunes. Result? 100% portability, will play through my Squeezebox now, and will dump to any iPod (in my family we have 4 iPods, but none that do video - I'm waiting for the full screen version to come out). Battery life is an issue with video, and if I'm on a transoceanic flight to Europe or Asia I'd rather have 14 hours of music than a few hours of video. They have movies on the plane anyway. iPod's just added games, too. It will be interesting to see if they are going to try and develop a PSP-like iPod in the future. I think Apple's future fortunes are in the business alignments they are and will be making with content providers so that they have material that fits neatly into their product development. Hell, there may even be a deal working between Apple and Walmart just so that Apple will have access to more Hollywood content. It looks like vigorish, but at the end of the day if it allows Apple to provide more studio content it will have been worth the ransom.
Apologies if this was already covered and I missed it in my scan of posts, but it's crucial to realize that MSFT has the enormous cash reserves to be in this for the long run, and they can afford to lose money for quite awhile in order to establish a beachhead. This is all part of their plan. They've stuck it out in the video game market, and I believe are turning a profit on it now. My first computer was a 128K Mac, and I'm a huge Apple fan. Can't stand Windows. The original MS Word was a terrible program on both platforms, yet it eliminated several superior competitors. It was a triumph of marketing in the same way Windows as a system drove the superior (to me) Mac OS to near extinction. The point I'm laboring toward: it's not all about the quality of the product, particularly when MSFT is involved. The huge difference in this scenario is that iPod/iTunes is already incredibly entrenched. Let's hope it stays that way, or that if it's unseated, it's by a far superior device/system than Zune appears to be.