By releasing the Zune HD, Microsoft is placing much of its hopes in the consumer space on a product that’s competing in a saturated market against a dominating force. The Zune HD will be the only portable music player Microsoft offers as it takes aim at Apple’s iPod line.
But it’s not unique. The Zune HD is just another product from Microsoft that puts a target on Apple’s back. It’s becoming increasingly clear that Apple is Microsoft’s focus going into the new year.
The Zune HD promises to be Microsoft’s best portable music player so far. It sports a touch-screen, HD radio, Web browsing and the ability to access Facebook and Twitter from the device. Users can also play games, although the product only features a handful of compelling titles.
Regardless, Microsoft is focusing its attention on the iPod with the Zune HD. The company clearly wants to use the touch-screen, the apps and the nice features to distinguish its product from Apple’s. It makes sense. The PMP space is being dominated by one company and so far no other vendor has been able to capture a sizable portion of the market. Originally, that was due to Apple’s monopoly on design and its iPod line’s close connection with iTunes. Now that iTunes is free of Digital Rights Management controls, Apple’s dominance has everything to do with how consumers view its products in the marketplace and the design of its iPods.
Microsoft realized that and in the Zune HD brought a product to market that, in my opinion, is the first viable challenger to the iPod.
But Microsoft didn’t stop there. Realizing it has had some serious trouble winning the PR war against Apple and its Mac OS X operating system, Microsoft is undoubtedly trying to fix its mistakes with the release of Windows 7 in October. The company has already started a massive marketing campaign that attempts to convince users that although Windows Vista wasn’t the best product the company has released, Windows 7 is one of the better products it has ever made.
Attacking Apple on Multiple Fronts
Importantly, Microsoft is touting Windows 7 as a viable alternative to Mac OS X. It has become such a battle between the two companies that the vast majority of Microsoft’s television marketing budget focuses on highlighting the issues (mainly price) that the company finds associated with Apple’s products.
Microsoft is also focusing on improving its mobile efforts. So far, the company hasn’t performed nearly as well as it might have liked in the mobile market. Its Windows Mobile platform has had little success in either the consumer market or in the enterprise, as Research In Motion and Apple have brought devices to store shelves that easily best those running Microsoft’s software.
Although Windows Mobile 7 is scheduled for a 2010 release date, it could have an impact on the market. Microsoft has said that it will be a vast improvement over Windows Mobile 6.5, which is slated for release Oct. 6 and will feature improved browsing, a better interface and more. Windows Mobile 7, like its predecessor, should compete more effectively in the marketplace where, you guessed it, Apple is setting the pace.
At the same time, Microsoft is getting ready to offer an app store from which users can download applications and add them to their mobile devices. According to Microsoft, Windows Marketplace for Mobile will have thousands of applications. The company also wants to entice developers to create apps for the platform by allowing them to charge what, as Microsoft put it at a developer conference, those apps are really worth.
But just what impact all these updates will have on Apple is up for debate. It’s most likely that Microsoft will find the most success in the OS market, where it still dominates. But in the mobile space and in the PMP market, it’s doubtful that Microsoft will be able to pierce Apple’s tough armor.
Microsoft’s biggest problem is simply that Apple dominates those markets. And although both the Zune HD and Windows Mobile will be improved, it’s doubtful that users will find reason to switch to Microsoft’s products.
So as Microsoft prepares to wage all-out war on Apple, it’s doubtful that the result will be as mighty as its intentions. That said, Microsoft will continue to enjoy strong profits. Its Windows 7 platform will dominate the software market. And Windows Mobile will hang tough. Just don’t expect major shifts in the industry.