Microsoft Throws in the Towel on Zune Player

| Rumor

That sound you hear is the noise of tens of Zune customers gnashing their teeth in dismay and consternation because Microsoft has quietly pulled the plug on its would-be iPod killer, the Zune. Bloomberg reported that an unnamed source “familiar with the matter” said that Microsoft would no longer introduce new Zune models, and would instead focus on Zune as a software component of Windows Phone 7 smartphones.

Zune HD

Zune HD: RIP?

Zune was introduced in 2006 by Microsoft as the first Microsoft-branded digital media device. The company had opted to produce its own device after its “Plays for Sure” licensing campaign with OEMs failed to make a dent in Apple’s dominance in this market. Unfortunately for Big Redmond, however, the Zune also failed to gain any traction with consumers.

Microsoft was, however, able to develop a music store under the Zune brand, which eventually grew to offer movies and TV shows, just like Apple’s iTunes Store. The company intends to continue to leverage this online store for its smartphone operating system as it fights to regain share in that market, just as it develops Zune software to play music and video on its phones.

Bloomberg specified that this decision has not been made public, and the media company’s sources were not willing to be named. We found that Zune.net still lists the Zune HD standalone device, but that the home page only promotes Zune “on your phone,” “on your Xbox,” and “on your PC.”

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10 Comments Leave Your Own

dmuzzy

“...tens of Zune customers…”

Nice.  smile

jameskatt

For the rare Zune user, it’s been nice not knowing you!

Goodbye, Microsoft!

wab95

I actually think I saw one once. What caught my eye was the brown colour and the industrial look. For the life of me, I cannot remember where I was, although memory puts me on public transport - so likely London on the Tube.

So, they still have the brand, and Zune now exists only on your PC (substantial market share but not very portable), Xbox (substantial market share but not very portable) and (Win7?) phone (underwhelming market share [but Nokia to the rescue] and very portable).

One wonders how they (MS) are reading this, and more importantly, where are they plan to go with it.

Christopher Letzelter

I’ve seen several Zunes in the wild, over the years.


Of course, I’ve seen countless iPods just in the last week…
Chris

geoduck

One wonders how they (MS) are reading this, and more importantly, where are they plan to go with it.

That implies that MS has an overarching plan. The last few years MS seems IMO to have been driven by Brownian Motion more than any firm hand on the rudder.

wab95

That implies that MS has an overarching plan

I am confident that they have a plan, but so did Custer. How that plan jibes with reality remains to be seen.

Ross Edwards

One wonders how they (MS) are reading this, and more importantly, where are they plan to go with it.

MS is a software company first and foremost.  The Zune hardware was, at least in cheek, a trojan horse all along—MS built it because nothing else they were trying was working, and the Zune store and Zune software was the payload they really wanted delivered.  Ultimately, the real money for MS is in software licensing, always was and always will be.

Of course, this doesn’t prevent them from doing left-hand-doesn’t-know-what-right-hand-is-doing stuff like the Kinect, which, though awesome, isn’t part of that core vision.  But then again, Ballmer is an idiot.

VaughnSC

If they want to leave the hardware twisting in the wind, maybe they can now license Zune to all those PlaysForSure licensees they left, uh, twisting in the wind. I sense a recurring theme. raspberry

geoduck

I am confident that they have a plan, but so did Custer

LOL Well said LOL

wab95

Ultimately, the real money for MS is in software licensing

Good point, Ross.

Although the last sentence in your post may be the most important, I see the challenge for MS in terms of their Zune store and software in just that, the licensing. I may be way off, but unless a company is assured of recouping their licensing costs and making a profit on the sales of say, handsets, they will be reluctant to pay those fees to put that software on those devices. Gains by Nokia in its tie-up with MS could put the lie to this line of reasoning, and it will be interesting to see how that plays out.

It just seems to me that MS gambled on the Zune as the workhorse vehicle for their music store, and now have lost. Their other options, including those Nokia handsets, have got to be less attractive alternatives.

As I said, I may be way off.

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