Microsoft launched the Zune back in November 2006 as a direct competitor to the market leader amongst media players, the Apple iPod. It was released to a sizeable amount of buzz, with many Microsoft fans hoping it would give the iPod a run for its money. Microsoft has now announced sales of two million, which while impressive, means it is still being trounced heavily by the Apple machine.

Sales of the Zune started well enough, with the first million coming well within Microsoft’s own target of June 2007. However, new data hasn’t really been very forthcoming since then, at least until now.

Electronista reports that as part of the recent Zune update, Microsoft announced that sales have hit the two million mark. This gives the company a slight gain on overall sales market share for the US, rising from 3% to 4%.

That’s all well and good, until you realise the market share that Apple enjoys – it sold 10.6 million iPods in the last quarter alone in the US, five times more that the Zune has sold in total.

The company which has seemed to do badly from the Zune’s increased sales is Creative, which has seen its market share drop from 4% to 2%. SanDisk retain second place with 11% market share.

The portable media player market as a whole has seen a drop over the past twelve months, partly as a result of a saturation of the market, with many companies offering players, and very few first time buyers making purchase. The global economic slowdown is also thought to have played a role too, with consumers generally less willing to spend money on expensive electronic gadgets they can live without.

The Zune is undoubtedly a nice piece of kit, but a combination of going up against an unbeatable market leader in Apple, and launching at the start of a recession means that Microsoft are unlikely to see much return for their investment.

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Entry was posted on Saturday, May 10th, 2008 at 5:32 pm under Apple, Microsoft, Retail.

Read more entries by Dave Parrack.
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