Microsoft unveils ‘iPod killer’

25 Jul 2006

Microsoft has developed its own digital music player entitled Zune that it hopes will challenge the current dominance of Apple’s iPod. The company plans to introduce a download service for the product later this year.

The Zune is a portable music player that allows people to share and sample tracks via Wi-Fi. The first Zune player is expected to enter the market later this year with more to follow next year.

However, Zune won’t be confined to just music but is being termed a ‘hardware player’ and the download service that Microsoft will launch later this year will include other content like movies.

At present Apple has a 50pc share of the global portable music player market and a 70pc share of the downloadable music market with its iTunes service.

However, industry reaction to Microsoft’s Zune revelation has been mixed and some critics have voiced concerns that Microsoft is in danger of isolating existing technology partners like Creative.

Jupiter Research analyst Michael Gartenberg believes Microsoft will find ending the dominance of iPod tougher than expected.

Writing in his blog he said: “Microsoft is clearly going to face a battle here. It’s good that they’re building a unique brand and following the Xbox tradition, distancing themselves somewhat from Microsoft identity but that’s not enough. It’s going to be hard for them to create the same level of cachet that Apple has with the iPod.

“iPod is more than a single device. It’s a platform in and of itself with a whole eco system of cases, car kits, speakers and docks.”

Gartenberg added that when Microsoft decides to enter a market, you can’t ignore the impact they will make. “It’s likely that by force of will and spending lots of money on marketing with a high cost of acquisition on new users, they will can capture some market share.

“Early market share, however, isn’t likely to come from disgruntled iPod users looking to switch. The real losers in the short term are likely to be the likes of Creative, iRiver and other former partners that have failed to deliver to market share from Apple and will now find themselves not only competing with Apple but with their former partners from Redmond,” Gartenberg said.

By John Kennedy