Overstock.com Clearance Dept. Ready for Zune

I really wanted to title this post “Zune everyone will get the Urge for an iPod”, but thought better of it. What good would it do to make fun of the two companies I’d most like to work for in the future, if for no other reason then to get a bit of what their smoking. The real question though is how to best sum up last weeks buzz about Microsoft’s hurried announcement of the Zune player, in response to Apple’s more interesting iTV/iPod announcements? Dare I joke about the dorky name? Have I the tech chops to suggest that another DRM crippled player isnt what the music industry needs. Should I play it straight, parrot the pundits and shill the Zune’s main selling point, limited Wifi sharing (3 tracks in 3 days and then poof its gone)? In the midst of all this musing it struck me, the real story here isnt that the Zune player is gonna take down Apple’s iTunes/iPod combo. The real story is that the Zune player could be the final nail in the coffin of the MusicGremlin. Never heard of it? Exactly!

Last month, in a much ignored press release, the good folks at MusicGremlin, Inc. announced the availability of the MusicGremlin to the collective yawn of the iPod buying masses. Its main selling point, wait for it… built in Wifi. Now that the beast in Redmond is going to be launching a similar player, the MusicGremlin is sure to loose its grasp on the segment of the consumers market looking for an expensive imitation iPod. An imitation with none of the cool factor, none of the sleek design and evel less format compatibility then an iPod. While the first generation Zune player is unlikely to compete with the fifth generation iPods, its sure to be a serious competitor to the first generation MusicGremlin players. In other bad news for the MusicGremlin folks, the 30GB Zune is likely to cost $300, the same price as their 8GB model.

Surely the backers of the MusicGremlin must know that with all the money that Microsoft has in its coffers its able to take an “L” on the Zune an treat it as a rounding error. Microsoft is still happily losing money on the x-Box and doesnt even expect to smell profits until 2008 on it. A sobering stat; Microsoft looses more on each x-Box unit ($126), then the retail price of the entry level iPod, the Shuffle ($79). Given all the time and money that Microsoft has to make the Zune a hit, it may one day challenge the iPod, which is four generations and 10 billion cool points ahead, for the top spot in digital device dominance. However this holiday season the only folks who have to be concerned is MusicGremlin.

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4 Responses to Overstock.com Clearance Dept. Ready for Zune

  1. Dan says:

    Don’t forget the even more obscure Handheld Entertainment complete with wi-fi enabled media player (hasn’t made it to production yet) and online media store (www.zvue.com). These guys are feeling the burn. Software development is tough, hardware R&D/manufacturing/distribution is a nightmare, and the combination of both kills a lot of ambitious companies. Suggestion for the MusicGremlins of the world, focus like hell…find a niche in the media player market and serve it better than anyone else does. It’s a really tough gig but they can’t compete broadly with MSFT or AAPL and expect to win.

  2. Siddiq says:

    Thanks for the post Dan. I wasnt even aware of this company. A $129 media player with only 250MB of storage on an SD card… Right!

    But their website is great!

  3. [...] 2) Its still way to expensive! The original price of the Zune was $284, then Apple announced that its newest 30GB iPod model would retail for $249 and MS was thrown into a flutter trying to recalculate just how big of a loss they were willing to take. Apparently the answer had lots of zeros because they came right back with a price that, unfortunately just matched Apple’s. lets say your in the store comparing two products with the same sticker price; on one hand you have a 5th generation Apple product that is a pop culture icon and on the other you have a first generation Microsoft product thats heavier, with a shorter battery life, a weird name and draconian DRM limitations. Which would you buy? Me to. Microsoft made the rookie mistake of thinking price was the same as cost and they didnt give me a reason to choose the Zune over the iPod. [...]

  4. [...] never been a fan of the Zune, back in November of ‘06 I laid out 10 reasons the Zune would fail and was [...]

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