Tuesday, March 20, 2007

The Zune and Shelf Space (again):

Last December 25th, I blogged about what I thought was Microsoft's expectations for its Zune (a competitor to iPod). Based on the enormous amount of shelf space for the Zune, I decided that Microsoft really expected it to be a serious potential iPod killer (which it ain't). I've just heard an interview with David Caulton of the Microsoft Zune team. (This is Leo Laporte and Paul Thurrott's 17th Windows Weekly Netcast.) Caulton says something different, and I want to respect his position, which does not seem to me to be an "after the fact" explanation.

Caulton says their marketing goal was to be second to iPod. Now the player market is heavily fragmented after Apple, and this was not an unreasonable goal. A good way to pursue that goal at Christmas time was to eat up all the shelf space normally reserved for iPod's competitors, and that's what I saw in the stores, with space usually reserved for SanDisk, Zen etc. full of Zunes. So maybe Microsoft pursued a "second place" goal by attacking the sales opportunities of all the best-known smaller competitors.

That brings us to today. Microsoft's story is that they have a long term commitment to the music player market. They ought to be able to catch up to Apple faster than Apple can innovate. It will be interesting to see what happens in the rest of 2007 and beyond.
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