Microsoft, give the European Zune market what it wants

Stan Beer
Sunday, 21 January 2007 08:36

Opinion and Analysis

The arrogance of Apple in the music player space knows no bounds. For Microsoft, this has created an unprecedented opportunity to carve out some real market share with Zune, especially if it hits Europe in Q4 this year. Unfortunately, however, the giant software company has been too ham fisted to recognize what it has in its hands.

The launch of the iPhone has demonstrated that Apple is reluctant to make full use of the Wi-Fi and processing capabilities of its amazing device and give the market what it wants - wireless music downloads.

Despite the fact that there are numerous mobile phones offering direct downloads and Sandisk has released the Sansa Connect, which offers Wi-Fi music downloads, Apple tells us that iTunes and  music should only live on a computer.

When Microsoft launched Zune last year, many of us did not recognize that it created a device with the potential of carving out a significant market niche of its own. It may not be particularly pretty but it sits nicely in a space that no iPod or other portable player reaches.

With a 3 inch screen and 30GB of storage at US$249, the Zune competes directly with iPod Video with a smaller screen. However, the Zune also has Wi-Fi capabilities and therein lays the problem. Microsoft has released a very reasonably priced device that has no real competitor but it has crippled the main differentiating feature that could help it take a significant slice out of Apple's market.

Sandisk recently unveiled the Sansa Connect at CES in Las Vegas. This device priced similarly to Zune has a small 2.2 inch screen, just 4GB of flash RAM and Wi-Fi capability. However, Sansa Connect allows users to purchase and download music online. Not surprisingly, Sansa Connect was nominated in the media as one of the outstanding products in the largest consumer electronics show on earth.

Compared to Sansa Connect, Zune has a much better and bigger screen, vastly more storage and the same onboard Wi-Fi. Yet for reasons known only to itself, Microsoft has chosen to cripple The Zune's Wi-Fi and limit it to some dubious application called squirting for which the market has expressed little or no interest.

Meanwhile, Apple intends to release the iPhone six months from now in the US and more than nine months away in Europe. When it does release iPhone, the cheapest version will be double the price of Zune with just 4GB of flash storage and it will not offer wireless music or video downloads.

All this means that Microsoft has the perfect opportunity to differentiate Zune in the market - provided it makes full use of its Wi-Fi capability. With 30GB of storage, a large screen and Wi-Fi, Zune is the perfect device to purchase music and videos online, which would give Microsoft's new music store Zune Marketplace the boost it needs.

The market has already expressed a desire for wireless downloads. Apple has effectively snubbed its nose at users by not putting iTunes on the iPhone. If Microsoft is serious about getting a foothold in this market, it should uncripple Zune as soon as possible, so that when it does launch in Europe, users will finally get what they want.