On the eve of Apple’s latest iPhone announcement, Microsoft is quietly zapping it’s Zune MP3 players. In many ways it isn’t a surprise, as Apple’s original pairing of the iPhone + iPod established a link in user’s minds that neither most digital distribution outlets or portable player manufacturers were able to break as sales through both the storefront and of the devices soared mostly in companion of one another.
Microsoft was one of the few who attempted to challenge Apple in both arenas with Zune by packaging a portable player with a storefront and management system. The experiment in cracking into either market though was never as successful as once hoped.
The initial adoption of digital portable music players was slow because of the difficulty in managing one’s library and device sync. For many users, Apple’s iTunes interface simplified the process considerably and provided the initial foundation for mass adoption. The interface also carried an embedded storefront component allowing the easy purchase of music that could be directly added to the library and thus simply synced to the device. Most other library management tools weren’t as plug-and-play and none featured an integrated storefront. By the time Microsoft brought the Zune experience to market it was already far behind the existing Apple experience.
Microsoft joined Apple, along with Media Monkey, JRiver, Snapfiles, Real as well as integrated OS overlays for HP and Dell in the media management space. Juke box programs of all shapes and sizes proport a litany of features for a variety of listening experiences. Although switching costs are relatively low between library systems, there’s a perception by the user that it’s more difficult than it is, so once one is established in their mind it takes substantial effort to produce a change in behavior.
Furthermore, the library management itself is beginning to undergo a metamorphosis from being primarily done via files on one’s harddrive to that of synced one being synced in the cloud. While Amazon, Google, Apple and others have begun migrating users to this change in behavior slowly, Zune has not really leveraged cloud computing as an asset. Briefly, there was buzz about Zune’s ability to purchase streaming songs that were not downloadable to compliment one’s existing music library, the streaming space itself was already overcrowded and the service never gained traction for them or competitors like Rhapsody hawking their own variant of it.
Zune also found itself competing against a plethora of digital media storefronts all vying for mindshare of the consumer after Apple. Unsuccessfully, eMusic tried expanding their catalog to include major labels, Best Buy purchased Napster (and is now dumping it to Rhapsody, which is another story), Walmart and Amazon attempted leveraging their own retail might and any number of smaller niche attempts sprung up. Against this noisy backdrop consumers were still actively acquiring music from other methods ranging from illegal sites to legal peer-to-pair mixtape sharing to still purchasing the occasional physical CD and ripping it. Despite Zune’s ability, like Apple, to manage and purchase music in the same interface, the product was never able to stand out from the crowd.
Digital Rights Management played a roll in that lowered adoption. Although Apple retained DRM well beyond when most others had forsaken it, the issue seemed to be a big barrier to entry for Zune users because of the ecosystem Microsoft created. Even though it supported DRM-free material the perception it was bound up in such a way was worrysome, especially given Microsoft’s previous bundling problems with browsers and office systems, etc. Consumer distrust was as destructive as anything else.
On the device side, many of the early MP3 players were perceived bulky and difficult to use. Apple’s now iconic light weight chassis with minimal buttons swiftly chanced user perceptions. The existing competitors in the market struggled to keep up with Apple’s innovation and by the time Microsoft got involved consumer mindshare was overwhelmingly dominated by iPod to the point of possible brand dilution from generification. Zune’s initial attempt was lackluster, suffering from many of the same usability faults others had. Microsoft learned from this and streamlined the device considerably but the damage was already done and despite solid reviews from techys overall adoption was flat.
Furthermore, the marketplace for music only devices is deteriorating in general as user move to more media centric devices such as their handsets and tablets. Music is one of many options for the consumer with these allowing them to consolidate the number of electronics they have to maintain, or carry. Zune devices attempted to remedy the singular nature by including extra like an FM tuner and wi-fi capability but were never able to transcend beyond being music players.
All that being said, Microsoft is probably doing the right thing by silently allowing a portion of the ecosystem to retire and rolling the key functionality to its other product lines. Zune’s backend digital storefront already lives with Xbox which has proved to be a beneficial pairing thus far. The next step appears to be integrating more of the software elements into the existing Win7 OS. Building on the digital delivery platform the Zune storefront could expand like Apple’s done with iTunes to distribute a broader range of licensed content, particularly apps. Furthermore, with the Zune media management technology it could create beneficial add ons to Win7 devices making them more appealing to the consumer. There’s also the possibility of taking the hardware that composed some of Zunes better components working with handset and tablet manufactures to integrate those features into their products. This would take Microsoft further away from the hardware end which it only has shown some proficiency in the past and puts it back more squarely in the software world.
As much as Microsoft wants to compete with Apple across the entire spectrum, the core competency of the company has never been to do that. Zune’s shining components weren’t able to stand out among the failures in trying to and distracted the company from being able to use key consumer insights into building the next great software products to drive mobile and cloud consumption. Maybe now, this will help refocus Microsoft to the task.