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News   - 12/14/2006

Zippy Zune doesn't beat proven iPod

Uzoma Anumudu chose the newcomer when shopping for a portable digital media player last month.

But now he has a problem: Microsoft’s new Zune player, which he bought as an alternative to the ubiquitous Apple iPod, isn’t in wide enough use.

The 20-year-old University of Pennsylvania student grumbles that it’s hard to test a feature that lets Zune users wirelessly beam music to each other. When he went to a local Starbucks in search of fellow Zune owners, he found only a field of iPods.

“Many people still don’t know what the Zune is,” he said.

Anumudu shows the promise and the peril facing Zune a month after Microsoft Corp. rolled out the portable digital media player and an online service for selling music. While the device has drawn early buyers – which even include iPod defectors – many mainstream consumers are preferring to stick with the proven Apple Computer Inc. device.

The lack of widespread use has made it hard for consumers to benefit from some of the player’s coolest features – like wireless file sharing. And the lack of compatibility with the iPod is discouraging others from giving Zune a try.

Microsoft is getting a lesson in how difficult it is to break into a market effectively owned by Apple for five years and littered with competitors. Despite initial strong sales that put Microsoft in the No. 2 spot in the market, the Zune slipped to No. 5 for the week ending Nov. 25, largely due to promotions offered by competitors such as SanDisk Corp. according to NPD Group, a market researcher in Port Washington, N.Y.

Microsoft executives say the software giant entered the market for the long haul and that they are on track to ship 1 million Zunes by June 30, the end of Microsoft’s fiscal year.

“The category is still very early and there’s a lot of room for people who bring in different experience and different approaches,” said Microsoft Vice President Bryan Lee. He described Microsoft’s effort to compete in music players as “a 10-year mission.”

With Zune, Microsoft faces the challenge of building a new consumer brand that isn’t associated with what Microsoft is mostly known for: software like Word and Windows that is more of a tool than a toy.

The company has done it before with video games. When Microsoft launched its Xbox video game player in 2001, Sony Corp. was the clear market leader and Microsoft was little known among gamers. Since then, Microsoft has made the Xbox into a viable competitor with Sony’s PlayStation 3 and turned it into a widely recognized consumer brand.

Zune’s ability to share files wirelessly has drawn converts from the iPod. Brian Timm, 17, a high school student in Northville, Mich., sold his 30-gigabyte video iPod and preordered the Zune last month so he and his friends who also bought Zunes could more easily swap heavy-metal tunes.

Sharing music was a hassle with an iPod, Timm said.

“Other than give you one of my headphones, I can’t do anything,” he said.

Taylor Krebs, 17, a high school student in Albuquerque, N.M., bought a Zune player last month after her iPod mini died in October. She said she lost hundreds of songs that she had deleted from her iTunes library but kept on her iPod.

But Microsoft faces a hurdle in its efforts to sway iPod users: For people who already use an iPod or the iTunes software, switching brands can be a pain.

The iPod’s popularity has spawned more than 3,000 accessories, from alarm clocks to stereos. Any item that needs to be plugged into the iPod dock connector is not compatible with Zune. Also, content purchased from the iTunes store must be transferred to a CD or DVD before it can then be digitally loaded onto a Zune.

Consumers say the format wars make buying a new brand a turnoff. Samina Akbari, for instance, already owns an iPod Shuffle and is looking for a new digital media player with video capability. While the 27-year-old artist from Brooklyn, N.Y., finds Zune’s wider screen and wireless sharing appealing, she wants to avoid transferring the episodes of “Project Runway” and “Grey’s Anatomy” she bought from iTunes. She plans to stick with iPod and iTunes.

“I’m not dedicated to iTunes, but I like the design of the iPod,” she said.

For its part, Apple says Microsoft won’t challenge its place in the portable digital media player market.

“We’ve built a pretty big community,” said Greg Joswiak, vice president of iPod product marketing. “IPod has become a part of the culture, and that’s going to be an interesting challenge” for Microsoft.

Source: Tacoma News Tribune    
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