No, it’s not time for Microsoft to kill the Zune

I’ve been reading a bunch on the internet about the big Microsoft layoffs and one thing that I saw a couple posts on was the notion that those layoffs should close down the Zune. This SAI post, I don’t know, just kinda bugged me.

Sure, the Zune isn’t doing so well. But find me a non-Apple MP3 player that is? As far as I can tell, the Zune’s got the second most widely known brand in the MP3 space. Sure it’s a distant, oh so distant, second, but you gotta start somewhere. Ok, so there was a 54% y-o-y plunge in sales is tough to swallow but I suspect it’s largely due to their complete lack of marketing of the product as compared to last year where there was a huge marketing push.

SAI suggests that the failure of the 30GB models on New Year’s Eve is somehow going to put a damper on consumer adoption. I think this is an example of bloggervision where he mistakes big news in the nerdosphere for big news in general. I will go out and poll everyone I know who isn’t a nerd (at least two people!) and ask them about the “high-profile failure” and I can guarantee you that no one knows about it. An MP3 isn’t a niche-nerd product, like say the G1 is, it tries to appeal to a mainstream consumer so you know, failures like that will have a net 0 effect on sales.

SAI is right in saying that there’s no point in pretending that the Zune isn’t a failure, but in my opinion that is no reason to close it down. The mobile market is where all the growth is going to be in the future. While Palm was busy closing down their PDA market, Apple was busy proving the the iPod Touch is a massively successful PDA that is opening up the marketshare for their mobile OSX platform.

Microsoft has a lot of stakes in this game. None of them successful. They’ve got Windows Mobile (for which they just announced version 6.5). An aging brand that doesn’t have a lot of positive connotations to it. They’ve got the Danger people who may or may not be doing something in their mobile space, but they’ve got some street cred for their niche but popular Sidekick phones. And they’ve got the Zune, which while not successful, is a brand with a reasonably good reputation – something that Microsoft has perilously little of.

They shouldn’t be closing it down, they should be doing something interesting with it to get back in the game. Come on, they don’t have anything to lose with this one, there’s no entrenched market they’re defending, they can get crazy with it! I think it’d be a big mistake to shutter it without giving it a good ol’ try. They need a presence in this land grab that’s just starting and they need it soon – working with any positive branding they have is going to help them get there quicker.

Robin

Right On! I think a lot of people want to see Microsoft have a few more failures - which is why you see so much "come on admit it" talk on the blogosphere. I have to say, I'm in that camp too.

I used to be a 'hater' - because I personally witnessed their representatives explaining how it was in their interest to undermine the competition through trade practices rather than innovation. However they are clearly doing a lot of good stuff too - certainly in programming languages, and their lab technologies, and it would be great to see this stuff get out into the world.

I'd love to see them be a real competitor. The problem is that they still have a gigantic market share and huge control over the computer industry in general. I think that if they start to achieve real success again, we'll be back to the place we were before - with another lost decade in terms of innovation.

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