A lot of people today are excited about the new Zune HD. And that’s great news for Microsoft, as it has been attempting for a few years now to even just steal some buzz from Apple in the MP3 market, if not sales. Well, they’ve succeeded in the first part, but the second? That could be much more difficult.
Microsoft’s new device sounds great: OLED screen, HD radio, HD video (720p) outputs, powerful Tegra chip, and most importantly a iPod-beating price of $219.99 for the 16 GB variety, and just $289.99 for the 32 GB version. That latter is a $110 savings over the comparable iPod touch, which the Zune HD clearly targets. And now it has a very real release date: About a month from now, September 15.
Are the planets aligning for a hit version of the Zune, finally? Not so fast.
Apple typically takes the first week of September to hold a press event to show off its new iPods. Last year, the event was on Tuesday, September 9. This year, that same second Tuesday is on September 8. Music industry sources tell MediaMemo’s Peter Kafka that Apple is going to hold an event the week of September 7. Bingo.
So yes, it looks very likely that Apple will hold its next iPod press event one week before the launch of the new Zune. And what does that likely mean? Aside from Apple likely talking about the “Cocktail” music format project it has been working on, and quite possibly a new social iTunes 9, also very likely to drop are the new iPod touches. Yes, the device the Zune HD is competing against. Uh oh.
Why uh oh? Well because while the Zune HD looks good compared to the current iPod touch, the new versions will certain be seeing some upgrades. What are the two most likely upgrades? A camera, which the Zune HD doesn’t have. And a price drop. Again, uh oh.
It’s not clear if Daring Fireball’s John Gruber has some inside information here or if he’s just making a prediction, but what he writes today certainly sounds like it could be the case for the new iPod touches:
The Zune HD prices look good compared to today’s iPod Touches, but not so much compared to the new camera-equipped ones Apple is set to announce next month (16/32/64 GB for $199/299/399).
That would make the Zune HD 32 GB only $10 cheaper than the comprable iPod touch. And again, with no camera, and no apps (at least not yet anyway). The Zune HD could still very well hold an edge with an OLED screen (it’s not clear if a new iPod touch would feature that) and the HD-outputs, but would that really be enough to dethrone the dominant player in the market?
Look, the Zune HD does sound very nice, and I’ve said as much many times. But the overall idea of the Zune is still a bit odd to me. It’s Microsoft burning money to compete in a market (MP3 players) that is slowly fading away. Now, there is undoubtedly a plan to get apps on it eventually, and I’m sure games, to turn it into more than an MP3 player. But right now, there is basically no mention of any of that by Microsoft. So that means that when it does happen, it will likely be months from now.
And even with those, the bigger question remains: What’s the end game here for Microsoft, which makes its money off of Windows and Office?.
My point is that Microsoft has spent the entire lifespan of the Zune chasing Apple’s tail, for what? The first hard drive-based Zunes came years after the iPod, and didn’t sell well. Then it released a Flash memory version well after the first flash iPods, and that too didn’t sell well. Now it has an iPod touch competitor 2 years after the iPod touch was released. On paper, it sounds promising right now, but come September 8, it’s likely to be one-upped by Apple yet again.
It’s not hard to see how this plays out, sometime next year we’ll hear about a new Zune HD that has a camera and has app support. The question is will the Zune HD have made any headway into Apple’s market by then? That is far from a certainty, despite the nice-looking new device.
What I’d really like to know is who plans these events for Microsoft? How on Earth didn’t they not realize that Apple has an iPod event pretty much every year now in the first few days of September? I’m sure it would have been a big pain in the ass, but why not put everything you have into ramping up production earlier and getting it to market before Apple can respond?