Zune not in the Christmas race with iPod: Gartner

Stan Beer
Monday, 06 November 2006 15:00

Your IT - Home IT

Microsoft's go to market strategy for its Zune music player has been subjected to some harsh criticism in a note targeting content providers and mobile carriers. Gartner has criticised Microsoft's strategy of song sharing between Zune players and points to weaknesses in content provision because of an absence of deals between Microsoft and music or video studios.

According to Gartner, Microsoft's strategy of of differentiating Zune through its ability to share songs over Wi-Fi is not particularly compelling, pointing to the fact that users can't buy songs through their player.

Gartner says: "Microsoft’s claimed differentiation for Zune is based on applying Web 2.0 community concepts to the music experience. With the inclusion of an integrated Wi-Fi/antenna, Zune users can exchange or share songs by transferring them to each other. Whilst Gartner believes this is a good, high level strategy that is potentially market leading, it is not clear that the scenario Microsoft describes is all that compelling. Consumers will not be able to buy songs or videos from the Zune Marketplace direct from the device. Instead users “share” songs and shared songs do not remain on the receiving device permanently; rather they can be played three times in three days."

Gartner also unfavourably contrasts Microsoft's access to content with that of Apple's.

Referring to Microsoft, Gartner says: "Most notably absent are any deals with studios for content, whether audio or video. The lack of video in particular is surprising given Microsoft’s early lead in video support with its portable media centre (PMC). The company has some content on MSN Video, which is not being leveraged by Zune."

Gartner says that a better model would employ a web-based community that extends to Microsoft’s online communities such as Spaces and Xbox Live and contrasts the company's position to that of Apple.

"With Apple’s latest roll-out of iPods – from low to high end – and a movie download service to complement the TV shows already on iTunes, (while only available in the US now) Microsoft is starting from square one with a music service that will be incompatible with existing Plays For Sure-based services such as Napster. The company is also preventing Plays For Sure hardware made by companies such as Creative, Samsung and SanDisk, among others, from working with the Zune Marketplace," Gartner says.

The Gartner note concludes that the 2006 holiday season is probably not going to be Microsoft's time in the sun with zune.

"By the end of the year, there will be the iPod/iTunes, a diminished Plays for Sure and the Sony Connect/Walkman ecosystems and a very immature Zune MP3 player. Microsoft will consolidate the Plays For Sure market share under Zune. However, there are doubts that it can generate enough excitement in the marketplace to create a real Christmas season race with Apple. Beyond this period though, Microsoft has a chance."

Of course, Gartner didn't mention the possibility that if Apple decides to launch its new wide screen iPod range in time for the holidays, Microsoft executives may as well go home early to help with festive season decorations - especially if Apple starts installing more iPod vending machines at stores like Macy's.