Can Microsoft turn around sinking Zune business with HD?
By Mike Ferro
The Zune business has been a sinking ship for Microsoft. With revenue being dramatically down and sales slipping, it seemed like the company was about to call it quits on the MP3 business. However, despite reported layoffs and revenue drops Microsoft believes the Zune HD will turn everything around.
Several months ago, the company reported in its filings to the Securities and Exchange Commission, that the Zune experienced a revenue drop of 54 percent. That is a significant drop in revenue for a line that has only been out on the market for a few years. It seems like Microsoft is fighting an uphill battle with Apple to exist in the MP3 market with the iPod.
According to CNET, the most troubling fact about Microsoft’s new launch of the Zune device is that the MP3 category is dwindling down. Apparently, even Apple is finding itself reinvigorating its iPod sales with a refresh of its Nano line. It seems Apple has done too good of a job of converting consumers to jump to the iPhone. To date, Apple has sold over 1.8 billion apps for the iPhone with over 30 million units sold.
The Zune HD device is a nifty gadget touted for its HD quality display. Unfortunately, I am not sure if consumers will care about HD videos on an eye squinting sized screen. Other perks to the device is the HD radio and ability to sync up with TVs. I am interested in the HD radio as that is something that could be pretty useful. I know radio stations have been trying to push HD radio for some time now but it really hasn’t taken off compared to satellite radio.
Despite Microsoft’s resurgence in interest with Zune HD it is difficult to fathom whether or not the company will have a shot at not only turning around the Zune business but also a dwindling MP3 market. It seems like Microsoft may be stuck one step behind Apple again before the Zune HD even gets the opportunity to make an impact.
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Stumble It!
September 20th, 2009
Zune HD is not called “HD” because of its display, actually, but because of its support for HD (digital) radio in the US. Of course, this makes it irrelevant for most other countries including my home country of Australia which uses DAB+ digital radio rather than the HD radio standard. Can’t see Microsoft releasing a “Zune DAB+”!
September 21st, 2009
Dan Warne is correct but incorrect the Zune HD at the moment only works with FM and FM HD but the THe radio chip that does this can support other digital radio streams as well so with a bit of firmware jiggery things things could be solved for other markets.
as for HD meaning HD radio I don’t but that at all