This post continues from my previous post Zune V/s iTune and iPod. Microsoft Corp. V/s Apple Computer Inc. again. Zune will be the second offerring from Microsoft that will have a hardware and a software story. The first is XBox.
According to a report in Engadget on Zune "additional Zune-branded devices will follow, including a portable video player and, potentially, a portable game device"
Michael Gartenberg of Jupiter Research has written an insightful blog post where he states 3 main issues with Zune:
1) How will Microsoft differentiate Zune with iTune and iPod given that Apple Computer Inc. (AAPL) has take a huge time lead in building features and functionality for its offerrings.
2) Will Microsoft be successful in building a lifestyle device given that Apple is a PRO at this game.
3) Microsoft will face a huge marketing and alliance challenge beyond just building an alternative of iTune and iPod. The challenge is that Apple has built a hardware platform around iPods that includes handhelds, car kits, speakers etc:
So what's the challenge? Essentially there are three things.
Creating a technically competent challenger - Arguably this is the easiest thing for them to do. Apple's shown the way on what features the market wants. Less obvious are how Microsoft will differentiate with features like WiFi, that few mainstream consumers want and serve as a something that not only boosts for the bill of materials but also kills important features like battery life. Good news is the focus is on music and video. Despite the rumors, there's no game functionality included according to MSFT (despite the team's xbox heritage). That will make a big difference in terms of marketing.
Creating a lifestyle device - Microsoft is clearly going to face a battle here. It's good that they're building a unique brand and following the Xbox tradition, distancing themselves somewhat from Microsoft identity but that's not enough. Zune isn't a bad name (and yes, that's the real name it seems although i did like Argo a lot better). It's going to be hard for them to create the same level of cachet that Apple has with the iPod.
Creating a platform - iPod is more than a single device. It's a platform in and of itself with a whole eco system of cases, car kits, speakers and docks. No doubt that MSFT will work hard to make sure that they fill some of the gap directly with first party stuff, but this is one area where consumer choice goes a long way in making the platform a success.
