Thursday, August 13, 2009

Is the Zune HD a Matter of Do or Die for Microsoft

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By Microsoft's standards, the Zune hasn't exactly been a success. In the two and half years since hitting the market what was once dubbed as Microsoft's iPod killer hasn't even come close to injuring the iPod. The original brown as you know what (UPS Trucks) captured 12 percent share of the portable music player market when it launched, but after upgrades to 80 GB and then 120 GB and then introduced 4 GB and 8 GB flash based Zune players, the market share has fallen to just 3 percent despite adding features such as an FM radio and WiFi syncing.

Microsoft is taking another at making shot at making a better Zune to attempt get back some market share. The Zune HD will come in two versions a 16 GB version and a 32 GB version which will come with a touch screen and a web browser. The HD moniker comes from the ability to display High Definition video using a docking station that hooks up to a HDTV (sold separately). The Zune HD also has an HD radio tuner which can play higher quality digital radio signals from compatible radio stations. (more info)

Selling the Zune has been a tough sell for Microsoft so far and there's nothing to say that the Zune HD will be any different. One of the problems that preventing public acceptance of the Zune is the fact that the Zune Marketplace music store is not available outside of the United States, The iTunes music store is one of the biggest reasons for the success of the iPods. Microsoft has been trying to apply the PC industry pricing structure to the Zune. Windows based PC's cost less than Macs which has lead to Windows being the dominate operating system in the PC industry. Zunes have typically been priced lower to comparable iPods many view iPods to be better than anything else and are willing to pay the extra cost.

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