Stan Beer
Wednesday, 15 November 2006 19:09
Opinion and Analysis
Page 1 of 2
Ovum analysts Michele Mackenzie and Jonathan Arber believe that Microsoft has not only missed the boat to break into the music player business with Zune but also missed an opportunity to score points against Apple.
The UK based analysts can afford to look at the
Zune launch with a measure of dispassion, as the hype of Zune will not
reach Europe until late 2007.
Their comments reflects no small amount of scepticism: "So will Zune be
that most mythical of creatures, the iPod killer? Frankly, we'd be
surprised. You have to wonder if anyone at Microsoft reads the news -
after all the flak Apple has taken in Europe for a lack of
interoperability, Microsoft could have seen an opportunity to score
points for its new service. But no, it is pushing a
vertically-integrated 'closed ecosystem' similar to the iTunes/iPod
model, meaning that Zune users can only use the Zune marketplace to buy
their digital music, and that Zune Marketplace downloads will only work
on the Zune device. Microsoft claims that this increases simplicity for
users, but all it really does is limit consumer choice further, and
reduce potential sales in the long run."
Mackenzie and Arber believe the time for vertically integrated services
in the music and video downloads business has now passed.
They say: "Two years ago, when the digital music market was still
nascent, a vertically-integrated service may well have been necessary
in order to attract consumers who were new to the concept of digital
music and wanted things to be as simple as possible. But consumer
awareness of digital media and its possibilities is currently higher
than ever, and users are becoming increasingly aware of the limitations
that a closed ecosystem imposes. Microsoft was fairly well positioned
here, as its PlaysForSure DRM system is used by pretty much every music
service and player aside from the iPod/iTunes. Unfortunately it seems
that music using PlaysForSure won't play on the Zune. Although
Microsoft has stated that it will continue to support PlaysForSure, the
launch of Zune is bound to cause uncertainty in the market, and we
wouldn't be surprised to see its competitors also going down the
vertically-integrated route, thus fragmenting the market even
further."
