Zune is Fine, Microsoft Insists

By  |  Monday, January 26, 2009 at 10:51 pm

Microsoft was quick to tamp down any rumor-mongering in the blogosphere about its 54% drop in Zune revenues, cautioning that the industry as a whole was down, and that its sales were in line with its expectations. In comments to Seattle P-I’s Joseph Tartakoff, Entertainment and Devices chief Robbie Bach repeatedly assured that the sales of the device were “fine.” Zune marketing chief Adam Sohn furthered Bach’s comments by adding that Zune’s limited distribution (US and Canada only) gave it little room for error — iPod is sold worldwide, thus the weakness here at home was offset by some strength abroad, and a lineup change also cannabalized sales.

What we’re still missing here Microsoft is hard numbers, so we can see exactly what your definition of “fine” really is.



4 Comments For This Post

  1. SkateNY Says:

    It’s truly fascinating when a company as large and looming and Microsoft can tell their church-goers that everything is “fine” with a product that loses 54% of revenues over the course of a year. That tells us something about Microsoft, but it also tells us something about Microsoft customers and investors, so eager to believe that what is false is actually true.

    I don’t doubt that many or even most Zune owners are satisfied with what they have. Here’s my thing: Apple dove into the MP3 market when that market was already well on its way to maturity. The iPod quickly made a big splash, and iTunes has played no small part in helping the iPod acquire a 70% market share. Apple did not engage in illegal, monopolistic business practices in order to achieve that level of prominence; nor did Steve Jobs hypnotize buyers, steering them towards the iPod.

    When the iPod was released in October of 2001, it succeeded during a recession caused by the terrorist attacks of 9/11. If the current economic climate adversely affected the Zune and other consumer products, then it stands to reason that it also adversely affected iPod sales. Yet, Apple reported a growth in iPod sales for the most recent quarter, versus a 54% drop in Zune revenues. How much better would the iPod have faired this quarter without the deepening recession?

    I believe that Microsoft and its investors need to re-evaluate the Zune with regard to how it affects other products, and how it affects shareholder interests. If I’m a Microsoft competitor — and I don’t believe that Apple and Microsoft compete in the sense that they appeal to very different groups of customers — then I truly hope that Microsoft continues to throw money and other resources at the Zune. Let them and their investors learn the hard way. Again.

  2. Jeff Says:

    Did Microsoft hire the Iraqi information minister?

  3. Forex Trading Macd Says:

    You must carefully choose Devices chief Robbie Bach. Appealing to almost everyone, especially when it comes to a lineup change, is the ” no work ” philosophy. There are some strength to home.

  4. Tim Acheson Says:

    What nonsense, written by somebody who clearly doesn’t understand what the Zune brand includes. (The device by the same name was just one experiment.)

    We don’t even know what the plans are for Zune on Nokia. But all available evidence shows Zune is on the up. Zune is taking an increasing bite out of iTunes’ market share. Is the author unaware of the facts concerning Zune?

    People love nonsensical speculation like this about MS products.