Full FeedZune death watch: Revenue down 54%
So the Zune’s not doing so well.
Shocking, I know. Macworld has a report from Microsoft stating that fourth-quarter revenue for the little music player that could (not) was down $100 million from last year, which, of course, is chump change to MS—the equivalent to what you and I would find in our couch cushions. But it’s also a decline of 54% of the Zune’s market from last year.
Lower sales of Zune portable music players led to the decline, Microsoft said in a 10-Q filing with the U.S. Securities and Exchange Commission on Thursday. The Zune platform also includes the Zune Marketplace online store and the Zune Social online music community.
Microsoft launched Zune in November 2006 with the hope of posing a serious challenge to Apple’s highly successful iPod franchise.
However, the iPod continues to outsell the Zune by a mile: Apple shipped 22.7 million iPods in the quarter ended Dec. 27, up 3 percent compared to a year earlier, it said in its 10-Q filing on Thursday. While shipments increased, iPod revenue for the fourth quarter was down 16 percent on a year earlier, as a result of price cuts and the introduction of cheaper models, Apple said.
I’ve said it before and I’ll say it again: Microsoft is losing this battle because they designed a music player to make the labels happy. Apple is winning because they designed a music player to make people happy.
So where does MS go from here? They’re still on track to close down MSN music in 2011, the iPod is still hot, and their “iPod killer” is the butt of jokes on their television partner, NBC. Strangely, the one thing they do have going for them is that the most popular online music store, iTunes, is going DRM-Free, and since the Zune support AAC files, Zune users could find themselves shopping at the ITMS.
The big question at this point is how long will MS continue to support the Zune? I give ‘em another year at the outside, but if they have another disastrous Christmas like this one…
Via [Macworld]
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Revenue for the Zune might be down because of the recession, or it could be because people are afraid it will freeze up again next New Year’s Eve
on February 13, 2009 at 11:28 AM - LINK