Menu
Analyst: Microsoft Zune plans may be a challenge

Analyst: Microsoft Zune plans may be a challenge

Analyst: Microsoft Zune plans may be a challenge

Microsoft's move to create its own-brand digital music player and services may hurt its existing partners more than it impacts against Apple's iPod, an analyst warns.

American Technology Research analyst Shaw Wu says that Microsoft's debut in the market will put it into direct competition with its partners.

"We believe Microsoft's action could also make partners think twice before deciding to work with the company on future projects. We view its entrance into portable media hardware as akin to a civil war, much like if it entered the PC hardware market to compete with partners Dell and HP."

He also warns that matching the iPod/iTunes user experience will be a challenge. Additionally, Wu points out that Microsoft may feel a financial impact as it tries to create a market for its Zune products.

"While most view the Xbox as a success, we believe it has been a failure financially with its billions in losses, with profitability likely a few years away, if at all. If it were any company other than Microsoft, we believe the Xbox would have been shuttered due to its being highly unprofitable [Microsoft lost US$437 million in its recent June quarter]. We believe its effort in portable media will likely see similar economics."

The analyst stresses his belief that Apple's music products and services are set for a Walkman-like period of market dominance. "Walkman maintained its dominance over a 15–20-year period despite countless competitors trying to create a 'Walkman killer’,” he notes.

Even if Microsoft manages to salvage relationships with its existing partners, create a compelling user experience and is prepared to exercise its financial muscle to penetrate the digital music market, challenges still remain.

Apple already has a strong selection of third-party accessory makers for iPods. It also holds a 58 million-strong iPod user base and 300 million iTunes users. Consumers have already made an investment in Apple's products, with over one billion songs and 30 million videos already sold.

Wu continues to recommend clients buy Apple stock.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Brand Post

What to expect from your IT Distributor

Whether you’re just starting out or you’ve been around since before the dot com rollercoaster, choosing the right distribution partner can be a pivotal factor in your success. This definitive guide outlines the traits that every IT partner needs to look for in their IT Distributor.

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments