Zune needs video content to succeed
A Zune software update will be released before Christmas. According to Microsoft it will fix some minor glitches and add some performance and other improvements. Nothing major.
Bill Gates said in an interview last month about Zune (I think it was about Zune) ‘We’ll do more things. But, you know, we’re vague and mysterious about what that is. I mean, but we’re not just going to do media; we’ll do more.’
Make of that what you will.
My guess is that if Zune is going to work at all Microsoft simply has to offer TV shows and movies for Zune now, if not sooner. It has a lot of options in this area and it is where things are happening and if Microsoft moves fast enough it can get a little ahead of iPod in offerings rather than sales.
The company recently started selling TV shows and movies for download to its Xbox game console so this is not a strange and new area.
Jupiter Research analyst Michael Gartenberg said that Microsoft needs to play catch-up in other areas such as support for podcasting and video content. It should also expand beyond a device based on a single hard drive — perhaps moving into a flash memory-based player. Michael Gartenberg said, ‘There is no flash Zune at a time when the iPod Nano is just flying off the shelves. Those are the things they are going to have to address in 2007 if they are going to be a credible player.’
That is analyst-speak for not knowing where Microsoft is going.
Microsoft has said it expects to spend hundreds of millions of dollars over the next few years to develop and market the Zune.
Microsoft CEO Steve Ballmer has acknowledged that despite the company’s satisfaction with the way things are going with Zune, it still has a lot to do. He said, ‘We think we have a great initial proposition, and we’re happy with the initial response. But we don’t fool ourselves. There’s a guy who’s got a lot of share, and we’re coming later in the day…So we have our work cut out.’
Quite right. You do have your work cut out and introducing video content like now would help with some of it.
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