It may be hard to fathom. The Zune portable multimedia player, introduced over a year ago, is selling out. Microsoft (NASDAQ: MSFT) could not give the first version away. Its attempt to take market share from the first place Apple (NASDAQ: AAPL) iPod was a very public failure.
But, the world's largest software company came out with a new and improved version for this holiday, and it appears to be a hit. According to the Associated Press "the 80-gigabyte Zune media player Microsoft launched Tuesday has sold out across the Web, to the dismay of online shoppers and delight of the world's largest software maker." There is talk of 10-day delays for Zunes ordered on Amazon.com (NASDAQ: AMZN).
The lack of availability of the device may seem like good news for Redmond, but it isn't. It may get the company some PR about the popularity of the new device, but the software company can't gain market share against the iPod if it does not have inventory to sell.
Microsoft may lack skills in terms of manufacturing hardware devices and managing its supply chain. Apple has been at the hardware business for well over two decades.
On reflection, there is nothing to celebrate about a Zune shortage, except at Apple.
Douglas A. McIntyre is an editor at 247wallst.com.











Reader Comments (Page 1 of 1)
11-17-2007 @ 11:31AM
ipodowner3 said...
You should go to Amazon and you might find out the reason for the Zune sell out. I saw one 30gb model marked down to on $89. The market for the product seems to reflect it's value, less than half of what others seem to get for similar specifications. MS monopoly is a money machine, they can subsidise any market that they enter, value or profit do not enter into their equation. Capitalism at it's worst.
11-17-2007 @ 11:53AM
orenkuhn said...
Try reading the article before posting. It said that the new 80 GB Zune is sold out.
Yes, the old 30 looks like a good deal too.
11-17-2007 @ 2:12PM
Dave said...
It's astonishing that so few of the original Zunes (zune 1) were sold considering there are so many millions of microsoft fans who hate Apple and will never buy an Apple branded product and consider all Bill's products manna from heaven. Microsoft must have inspite of spending billions and having a successful product (the ipod) to copy from created a really sucky music player.
The Zune 2 seems to be an improvement but the PC press (from the reviews I've seen) seem to have gone completely overboard with soppy glowing reviews, fawning over every little feature. According the PC press because it's better than Zune One and doesn't completely suck (although it's still dead duck ugly) it's greatest thing since the wheel was invented. See for example they seem to only compare Zune 2 with ipod CLASSIC! The classic is Apples old technology. Why don't they compare the TOP of the line microsoft music player with top of the line Apple, the ipod touch (or the iphone which is also a music player)?. One reviewer even said Microsoft is ground breaking because unlike apple, the Zune has wireless! With bias reviews like that, probable low suppy and a willingness to lose money (Zune business is not profitable yet to microsoft as was the Xbox for years) no wonder the Zune 2 is selling.
Give a Zune 2 to a teenager whom you have promised an ipod Touch or an iphone and see one teenager break into tears.
11-18-2007 @ 3:17AM
Bonrock said...
"See for example they seem to only compare Zune 2 with ipod CLASSIC!... Why don't they compare the TOP of the line microsoft music player with top of the line Apple, the ipod touch (or the iphone which is also a music player)?."
Maybe because the Zune 80 is the same price as the iPod Classic 80GB? Your logic is pretty twisted. If a car magazine compared the Toyota Camry to the Chrysler Sebring and said the Camry was better, would you say, "Oh, that's not fair! The Sebring isn't Chrysler's best car, why aren't they comparing the Camry to the Dodge Viper?"
11-17-2007 @ 7:43PM
Stan Scott said...
Apple used to do this all the time. Selling out of a product is COMPLETELY dependent on how many you manufacture, right? How naive can you be?
11-17-2007 @ 8:37PM
christina said...
"Give a Zune 2 to a teenager whom you have promised an ipod Touch or an iphone and see one teenager break into tears"
hah... imaginable
If you take out a ipod touch or iphone in school, ppl's gonna ask to see it and think is cool. But you reach into your pocket and came out with some high-tech looking brown zune... well? cool or crazy geek?
11-18-2007 @ 11:54AM
dave said...
Banrock said:
"Maybe because the Zune 80 is the same price as the iPod Classic 80GB? Your logic is pretty twisted. If a car magazine compared the Toyota Camry to the Chrysler Sebring and said the Camry was better, would you say, "Oh, that's not fair! The Sebring isn't Chrysler's best car, why aren't they comparing the Camry to the Dodge Viper?"
Well my point that Zune 2 is still being compared to Apple's OLD TECHNOLOGY holds water! Apple hasn't advanced the ipod CLASSIC that much because most of all Apple's new stuff is in the ipod Touch and the iphone. Gads! After all the billions and having a sample (the ipod) to rip off from all Microsoft can come up with is to MATCH apple's old tech?! Imagine mac reviewers fawning over MacOsX if after spending hundreds of millions Apple only matched Windows M.E! And yet PC fanboys and reviewers fawn over the Zune2! It's ridiculous.
I woudn't even compare the top of the line Apple with the top of the line Microsfot music player as being Camry to Sebring, more like ipod touch is a lamborghini and the Zune a Ford Escort!
Secondly, PRICE. Yeah maybe the zune matches the ipod Classic price but WHAT DOES THAT PROVE when microsoft is willing to LOSE MONEY? If apple was willing to LOSE MONEY it can sell the iphone for $100! That's why Microsoft stock is up by about 18% and Apple by about 100% the last year -- stockholders don't like companies who throw money away.
Microsoft only made money on Xbox THIS quater after losing millions! and only because of Halo and quess what, Bungie jumped ship from microsoft! Even they know a dud company with dud tech when they see it!
11-18-2007 @ 4:33PM
Stage Diver said...
I just got my Zune 80 and guess what fanboys and girls, you dont have have one. Its to bad you guys act so devoted to a company (Apple) that pimps you out. How sad... that company uses its base to whip up free publicity. You guys should try to be inpartial to new technologies or new products.
11-19-2007 @ 9:49AM
Jeff said...
I saw some zune 2's behind the case at target and was excited because they were super thin. Then I noticed that they were non-working, not to scale models at least three times as thick. lame.
11-19-2007 @ 11:38PM
Joshua W said...
Get your facts straight. According to Windows Enthusiast Paul Thurrott, "The Zune 80 was never manufactured in volume, and many retailers never got a single unit to begin with."
http://www.windowsitpro.com/windowspaulthurrott/Article/ArticleID/97612/windowspaulthurrott_97612.html
11-20-2007 @ 12:35AM
Chris M said...
$89 for the 30GB brick Zune? Its a good deal. It works with your XBox360. It has decent battery life. Its goofy looking in a good way.
And it $89. I like it.