Zune: a Misfit for Microsoft?

Microsoft eagerly entered the digital music player industry earlier this month by releasing the much anticipated Zune. However, the product's place in the company is not yet a perfect fit; in fact, Microsoft's whole strategy with the device seems a bit puzzling.

The Microsoft Zune, similar to Apple's iPod, exists within an ecosystem that unites music player and music content into a closed system. Clearly, Microsoft's decision to create a closed system reflects the company's aim to mimic Apple's success. However, the move seems to be inconsistent with Microsoft's strategy of encouraging partner innovation.

To illustrate, consider the fact that Microsoft stopped offering pay-for-play music downloads on the MSN Music website prior to Zune's launch. Rather than offering a solution for all non-iPod digital music player owners, Microsoft now only offers the Zune Marketplace (to Zune owners) as a source for music downloads.

Making Zune compatible with the Windows Media line may have made more sense for the company, rather than trying to copy a system that comes from a company with a completely different culture. "If the wheel wasn't working, they needed to look within and ask why aren't we being successful here, rather than reinvent everything," says Stephen Baker, Vice President of Industry Analysis for market researcher NPD. (Source: microsoft-watch.com)

Adding to the Zune's problems is its image; or, more accurately, its lack of image. While the iPod has cornered the market on "cool," the Zune lacks an image which gives it bearing in the market.

While Microsoft has relied on Zune's additional features to distinguish it from the iPod (such as the ability to share music between Zune owners), the company has neglected to generate any compelling reason for consumers to rush out and buy a Zune. The Zune fails to compete on the basis of price, it's bulkier than the iPod, and has been reviewed by critics as being less user-friendly. (Source: sfgate.com)