Recent Comments:
Microsoft's Zune finds an Apple's iPod killer {BloggingStocks}
Nov 9th 2006 4:12PM In my last comment, I said "particularly given the consumer-unfriendly limitations Apple has placed on it" when referring to the Zune wireless sharing capability. I meant Microsoft, not Apple (in case that wasn't obvious). Yeah, I need more sleep.
Microsoft's Zune finds an Apple's iPod killer {BloggingStocks}
Nov 9th 2006 4:08PM Douglas,
I don't understand your comment about ripped CD content. Most of the music on my iPod is music I ripped from CD's that I purchased. Newer music I generally purchase directly from iTunes. I don't understand why a music executive would care whether their customer buys CD's in a music store or through iTunes, then placing it on an iPod. (Actually, their profit margin is higher through the iTunes model.) Are are you confusing the term "ripped" with "ripped off," as in "stolen?" Ripped is the technical term that describes encoding music from a CD into a digital format such as MP3 or AAC. It does not imply that the music was stolen or illegally copied.
As far as the Zune putting pressure on Apple, well, that's highly doubtful. We'll see. I doubt Apple is feeling the slightest bit of pressure over Zune. There have been dozens of "iPod killers" in recent years that never panned out, from companies much larger than Apple (such as Sony). The only interesting feature of the Zune is the wireless peer sharing, although it's questionable whether that's a feature people are really going to care about (particularly given the consumer-unfriendly limitations Apple has placed on it), and good luck finding another Zune owner to use the feature with. Bit of a chicken and egg problem there -- the feature is worthless unless Zunes are everywhere, and there's really nothing compelling about the Zune that will ever allow it to be everywhere.
Apple has economy of scale. They "get" design and are in sync with the features customers really want. There is an entire iPod ecosystem of accessories, including automobiles (something like 70% of 2006 car models have support for the iPod dock connector). And Apple has perfected the hardware/software/on-line store model, working perfectly in harmony. It's not like Apple is done innovating, either -- I assure you they're pouring more R&D money into future iPod products than Microsoft is into Zune. One difference, of course, is that Apple is making lots of profit. It's hard to see Microsoft turning much product with the Zune or future products in that category -- and it's been reported that they panicked when Apple recently dropped the price on the video iPods. Microsoft wasn't expecting that; they had to match the price, of course, and that means they'll likely be losing money on every Zune they sell. Especially when they're giving a cut to a music studio. That makes little business sense and isn't going to pay off for them in the end.
But, you know, 12 months from now we can look back and see what happened.
Microsoft's Zune finds an Apple's iPod killer {BloggingStocks}
Nov 9th 2006 9:52AM The author writes:
"One of the reasons this model is attractive to music companies is that much of the content on most iPods comes from ripped CDs, which means that the music publisher gets nothing."
Umm... Right. The music company doesn't get something from the ripped CD's, except, you know, the money they got from the original purchase of the CD. (Which is certainly much higher than anything Microsoft is paying them.)
This analysis seems to be flawed. I'm sure Universal will love the money it gets from those dozens of brown Zunes that will sell this holiday season. Let's see, how many millions of songs does Apple sell on iTunes each week?
