“On the music scene, we are pleased by the favorable editorial reviews received by the second generation of Zune. 1.5 million people joined the Zune social online community during the holiday season and music downloads from our marketplace approximately doubled from last year.” From MSFT Earnings call transcript 1-24-08.

“In terms of market share and unit numbers, the mix has been a little different than we expected. We’ve had better performance on the 80 Gig than we expected and a little less on the 4 and the 8 Gig than we expected. We also think there’s been a little bit of cannibalization from the 30 Gig because of the price point that has been at, that’s made the 4 and the 8 look a little less attractive. As the inventory on the 30 Gig has gone down in the channel you’ve seen the 4 and the 8 Gig come up, so I think we know there’s some substitution effect that’s going on at that price point.”  From MSFT CES-financial-analysts-call-transcript

In earlier quarters, MSFT announced they had “shipped” 1.2 million Zunes. We have noted in other posts, they sold the 30GB ZUNE for as low as $79.88. (MSFT may have lost $100 per unit at this price)

MSFT’s total Zune sales to date may be 3-5 Million.

Not a great competitor!!!

So MSFT sold 1.5 million Zunes during the Christmas season? That’s really small market share for a company that wants to be a consumer digital device giant.

MORE Zune sales data.
Bill Gates on CNBC this morning on Zune sales…................................................................................nothing…........

[quote author=“DawnTreader”]So MSFT sold 1.5 million Zunes during the Christmas season? That’s really small market share for a company that wants to be a consumer digital device giant.

What makes you say such a high number, DT? Zune Social is just a free online thing (like AFB ).

Here’s my revised version of what they could equally have said on the analysts call, supported by the same facts:

“On the music scene, there’s still plenty of editors who know what they need to do to be invited to Microsoft events, so we got some good reviews. With us flushing away the 30GB Zune 1’s, 1.5 million people tried out the new free Zune social online community during the holiday season to see if it was even worth picking up a Zune 30 for $80. People who had locked themselves into a Zune subscription account last year stepped up their downloads to get a bit of value out of their subs until they can cancel.

Market share and unit numbers are too embarrassing to disclose. After the Zune 30 bombed last year, we really thought we might sell a few flash players this time, but it’s been a little different than we expected. Once the $80 Zune 30’s were flushed away, we did sell a few new Zune 80’s to diehard Microsoft fans, but we got nowhere with the 4 and the 8 Gig. We’re pretending the cheap 30 Gig was holding up end user 4 and 8 gig sales, but actually we had to bribe the channel with the Zune 30’s at $50 to make them take any flash Zunes at all. At least we finally managed to get a few flash Zunes into the stores.”

[quote author=“sleepygeek”]
“On the music scene, there’s still plenty of editors who know what they need to do to be invited to Microsoft events, so we got some good reviews. With us flushing away the 30GB Zune 1’s, 1.5 million people tried out the new free Zune social online community during the holiday season to see if it was even worth picking up a Zune 30 for $80. People who had locked themselves into a Zune subscription account last year stepped up their downloads to get a bit of value out of their subs until they can cancel.

Market share and unit numbers are too embarrassing to disclose. After the Zune 30 bombed last year, we really thought we might sell a few flash players this time, but it’s been a little different than we expected. Once the $80 Zune 30’s were flushed away, we did sell a few new Zune 80’s to diehard Microsoft fans, but we got nowhere with the 4 and the 8 Gig. We’re pretending the cheap 30 Gig was holding up end user 4 and 8 gig sales, but actually we had to bribe the channel with the Zune 30’s at $50 to make them take any flash Zunes at all. At least we finally managed to get a few flash Zunes into the stores.”

Awesome.

Is this British humor?  British satire?

No.  It is reality. 

The Zune is supposed to foster a social community. The zune insider is one of MSFT’s websites.   HERE is the Zune insider’s poll of members “tag”. So far, in 4 days they have 195 registrations. I am number 194. ( I don’t own a Zune.!)

Attention K-mart shoppers….....Zune price drops in aisle 32 at the flashing blue   light

New Zune ads HERE
I am speechless.

[quote author=“artman1033”]New Zune ads HERE
I am speechless.

Microsoft REALLY needs to hire a new advertising firm.  That’s just weird (and not in a GOOD way). 

That is such a sad waste of money. 

But it does describe what they think of their product and customer base. 

That does not project the type of image I would want.

Zune Ad??.....
YIKES!!   
It really is quite sad.

Zune SALES tanking..

No evidence other than Amazon ranks. The article is just trying to catch viewership.

NO Valentine pink Zunes available

The Zune is a niche product that has not found popularity nor success as an iPod alternative. It will attract some buyers. Microsoft has enough problems with the relative failure of Windows Vista. The integrated market model for Microsoft products is no longer finding mass success.

I don’t think Microsoft is as much interested in selling Zunes as it is in impeding Apple’s ability to drive revenue through QT/iTunes. IMHO Microsoft has failed in achieving that goal.

Apple’s goal is to provide a revenue solution. While so many people are fixated on the slowing growth of iPod unit sales, few are seeing the new iPods as a means to drive revenue to the company. The iPod’s success needs to be measured in terms of Apple’s ability to sell content through the products more so now than how many shuffles in a quarter might be sold.

THIS is unbelievable!!!
“While the company hasn’t released sales figures for the Zune, analysts estimate that there are more than one million of them in use today.”