Far from a "me too" iPod, Steven sees profound implications in this new technology – he says Zune is a strategic new direction from Microsoft — the development of entirely new platform for content consumption and distribution.
He really likes the WiFi aspect of Zune, which allows users to "beam" their music to friends, becoming "mini dejays", and thinks this aspect of Zune will be the real challenge to Apple’s iPod.
Microsoft’s Zune — It’ll Be A Two-Horse Race . . . Someday, Says Forrester’s Ted Schadler
Many thanks to Forrester Research analyst Ted Schadler for sharing his POV on all of this with Beet.TV.
Zune will compete head-to-head with Apple’s iPod/iTunes/iTunes Store offering. It’s the first major commitment to the US market with an end-to-end solution (though Samsung has announced it will do the same in other markets and Nokia has signaled its intent to do the same with phones).
This is a big deal for three reasons:
1) Digital experiences — end-to-end solutions that integrate products, services, and content — clearly win. You don’t have to look further than Apple or Sonos to see the benefits of a closed system that is tightly integrated.
2) Microsoft has proven with Xbox that it has the ability, muscle, and stomach to break into a tough hardware market dominated by an incumbent. There is no reason that Microsoft won’t outspend Apple in products, media, and marketing to compete. And don’t forget, Zune will offer a subcription service for music and probably eventually a rental and subscription model for movies and TV. Studios would be happy to see Microsoft replicate the rental model online — and give Apple a run for its money.
3) Microsoft is breaking with its traditional license model. As it did with Xbox, Microsoft is departing from its “open API/open licensing” approach to software to create instead a closed system. That will make Windows DRM more successful again Apple in the Zune product. But it will annoy customers like Samsung, SanDisk, Yahoo!, and AOL that use Windows DRM today. However, as I wrote previously, it’s a risk worth taking
However, Microsoft certainly won’t eat into Apple’s share in 2007. Instead, the biggest losers will be RCA, Archos, Creative, and iRiver.
Thanks again Steven and Ted. Much obliged.
— Andy Plesser
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