Microsoft's Zune range of audio and video players has had disappointing sales. We examine why the devices didn't sell as well as hoped and what the future holds for the range.
What is the Zune?
The Zune is a range of portable media players produced by Microsoft since 2006. The name is also used for the software the players run and the accompanying video and audio content sales. The device was clearly designed as a rival to Apple’s iPod range.
How well has it sold?
In the most recently released figures, covering the last three months of 2008, revenues from the Zune brand dropped by $100 million, a 54% fall on the same period in 2007. Though Microsoft says the results were roughly as expected, these figures are still a disappointment.
Why did the Zune not sell better?
Most analysts believe the Zune struggled because it didn’t fill a specific market niche. Most consumer electronic devices attract an audience through one of three methods: being a fashionable or stylish device (such as the iPod), being either technologically superior or particularly simple to use, and being much more affordable than its rivals. The Zune doesn’t really fit into any of these categories and the Microsoft brand name doesn’t seem to carry much weight with consumers outside of computers. It’s also possible that less popular devices such as the Zune have been among the earlier victims of economic problems affecting consumer purchasing.
The leap year problem
On New Year’s Eve 2008, owners of the 30GB Zune around the world found the device crashed and locked up. The only solution to the problem was to let the battery drain completely and then restart the device the following day. It turned out the operating system in the device had not been programmed to deal with leap years, meaning it was confused when 2008 had a 366th day. While the incident didn’t cause any long-term damage (beyond inconveniencing anyone planning to use a Zune to provide the soundtrack to a New Years party), it was extremely embarrassing for Microsoft to have not foreseen this problem in a device released in 2006.
What does the future hold?
Microsoft insists it will continue to manufacture and develop the Zune and has even talked of producing exclusive video content for owners. However, there is a lot of speculation that dropping the Zune would be a sensible move as Microsoft continues to deal with the slowing economy. That’s particularly important given that financial reports suggest excessive costs are more of a problem for the firm than falling revenues. It’s also notable there have been no significant new Zune devices released for more than a year.
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