Zune Faces Long Road to Selling 1 Million By June
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By Benjamin J. Romano, Seattle Times  Dec. 7--Microsoft expects to sell more than 1 million Zune digital media players by the end of June, an executive said Wednesday.
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While Microsoft's new Zune won't topple iPod as the leading media player, a survey indicates it could eventually take sales away from Apple.
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(InfoWorld) - Napster, the remade version of the popular Internet music sharing service, is in talks over a sale or possible strategic partnership, the company said Monday. The announcement comes as a steady stream of new competitors enter the market, includingÂ SanDisk with partner RealNetworks, andÂ Microsoft with its Zune MarketplaceÂ strategy. It also comes amid a sharp downturn in user figures for Napster, which has seen its user base erode to 512,000 users at the end of June, from 606,000 at the end of March. Napster said it has hired UBS Investment Bank to assist management in the "evaluation of strategic alternatives," in response to interest from a third party in potentially acquiring or establishing a venture with the company. Napster also said it remains in a strong position to continue building its own business, with or without such a deal, highlighting its cash position of $97 million. The announcement sent Napster's Nasdaq-listed stock up 12.4 percent in after-market trading, to $3.99. The company set no timetable for finalizing the evaluation, and said the talks may not result in any deals. Formed in 1999, Napster popularized peer-to-peer music sharing on the Internet, gaining notoriety when a recording industry lawsuit ultimately shut it down and set the precedent for further legal victories over similar online services. A few years after the legal defeat, RoxioÂ bought the rights to its name, and in late 2003Â re-launched itÂ as a legal music download store. Napster faced stiff competition from the moment of its rebirth, mainly from Apple ComputerÂ and its popular iPods, and the iTunes Music Store. Napster currently offers a free 512MB digital music player, or a 1GB one for $50 to users who sign up for its monthly service for three months. It also started an advertising-supported music service in May that allows users to listen more than two million songs at no charge, up to five times each. The company reported a net loss of $9.8 millionÂ in the three months ending June 30, on revenue of $28.1 million.
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While overall sales may not be all that impressive, there is still a rabid enthusiast community looking to snag some 100 special edition pink-colored Microsoft Zunes, which have begun appearing on eBay.
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PERSPECTIVE This week's revelations from Microsoft concerning its forthcoming Zune portable media player have been appropriately called a "non-announcement announcement." But analysts tell BetaNews there's still good reason to believe this bewildering new market entry could actually succeed.
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A slow sales start for Microsoft's new Zune music player means it is unlikely to be a threat to the popular iPod this holiday season, according to analysts.
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Microsoft says Japanese firm Toshiba will make its Zune portable music player, due out later this year.
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By Byron Acohido  SEATTLE -- In a bold strategic overhaul, Microsoft on Thursday confirmed that it will launch Zune and Zune MarketPlace this fall in hopes of playing catch-up to Apple in the fast-emerging digital entertainment market.
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Microsoft Corp. said on Thursday its  new Zune music player will be sold at a price matching Apple  Computer Inc.'s market-leading iPod and, as a result, lose  money this holiday season.
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Microsoft's iPod rival Zune will be on store shelves in time for the holiday shopping season.
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Microsoft has sent a letter to buyers of its pink Zune, because the special edition player may not arrive in time for Valentine's Day.
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(InfoWorld) - Microsoft Corp. has predicted it will sell 1 million Zune devices in its first six months, a figure that would be more than Zune's chief rival iPod sold in its first 14 months but a relatively slow start for the much-hyped MP3 device. SinceÂ its retail debut on Nov. 15, customer interest in Zune has been lackluster, analysts report, and the company's projections for sales of the device are conservative. By contrast, Apple Computer Inc. will likely sell about 25 million iPods over the same period according to financial analysts, though the company only sold 600,000 iPods in the first 14 months of availability. Mike McGuire, a Gartner Inc. research vice president, said he was surprised Microsoft is expecting to sell so few Zunes in the first six months, given that the market for iPod and MP3 devices is thriving. On the other hand, "it's a decent objective," he said. "I was expecting a more aggressive goal," McGuire said. "But even though it's conservative it's going to be tough [to make that goal]." McGuire cited the fact that Microsoft is only offering one version of the device and the rapid nature of the media-player market, which is moving forward with new, cutting-edge devices all the time, as challenges for the vendor. Microsoft's achievements with Zune will depend on how successfully it builds a community around the product with its Zune Marketplace software and online store, as well as how quickly it can upgrade the initial Zune device with new features and models, McGuire said. Zune is in a distinctly different position than iPod was at its launch. IPods could only be used with Apple's Macintosh computers, which have a significantly smaller market share of the desktop computer market than Windows machines, the platform for Zune. In October 2001, when iPod was released, Apple PC market share was about 2.4 percent. And iPod was an unproved device, one of the first of its kind in a market that Apple ostensibly created, whereas Zune has the benefit of entering a thriving market. Of course, iTunes software for iPods now runs on millions of Windows PCs in addition to Macs. To date, Apple has sold more than 67 million iPods, and should sell about 82 million by the end of the year. The company has several versions of the iPod -- the video iPod, the iPod nano and the iPod shuffle -- in various sizes and colors. There are also an extensive array of accessories available for iPods. Microsoft's 30G-byte Zune costs US$249.99, the same price as the video iPod, but it's different from the iPod in two key ways. Zune includes an FM tuner and wireless capability that allows users to share songs between devices.
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The full power of the Microsoft brand will be behind the launch of the Zune media player Nov. 14, and Apple has reason to be afraid.
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Microsoft said Wednesday that the head of its Zune music player division will be leaving the company to pursue personal interests. Bryan Lee will be replaced by J Allard, who recently oversaw the company's Xbox business.
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Microsoft has beaten its goal of shipping over a million Zune digital music players by June.
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Blog: Though the devices still seem hard to spot in the wild, Microsoft says its market share is holding steady and reiterates its plans to sell 1 million of the devices by June.
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Microsoft is celebrating Tuesday, as the company beat its goal of shipping one million units of the Zune music player several days before its June target, the San Francisco Chronicle reports.