mmended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash The Zune. It’s Micosoft’s entry into the portable player market, and their shot across the bow of industry leader Apple. The little iPOD has be come ubiquitous the world over. Far from constrained to college campuses and teeny boppers, the iPOD’s now sported by business execs, attorneys and soccer moms. Understandably, Microsoft wants a piece of the lucrative, personal media player pie. Apple’s got a vice-like hold on the market, however, and it could prove a tough nut to crack for Microsoft. Currently, the Zune holds about a 10% market share in the hard drive based player segment. This is after the first 5 months of the players on store shelves.

Why would you buy a Zune over an iPOD, or any other media player for that matter? Well, most users cite the large, 3” video screen as a primary reason for their purchase, followed by the WiFi capability. There are other WiFi enabled players on the market however, such as the SanDisk Sansa Connect. To make matters even tougher for Microsoft, the Slacker, to be introduced in the summer of ’07, will allow users to receive satellite based content so they can get downloads where ever they happen to be. Another reason to choose the Zune over the iPOD would be Microsoft’s subscription media download service, Zune Marketplace. By paying a monthly subscription fee, users of Marketplace can have millions of tracks and videos at their fingertips without paying for each individually (That would probably be cost prohibitive for most consumers).

Apple claims consumers don’t want such a service, but industry analysts point out that it could be a viable option for some. For those that do prefer the subscription model, the Zune would become the player of choice. Analysts have recommended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash b

wever, and it could prove a tough nut to crack for Microsoft. Currently, the Zune holds about a 10% market share in the hard drive based player segment. This is after the first 5 months of the players on store shelves.

Why would you buy a Zune over an iPOD, or any other media player for that matter? Well, most users cite the large, 3” video screen as a primary reason for their purchase, followed by the WiFi capability. There are other WiFi enabled players on the market however, such as the SanDisk Sansa Connect. To make matters even tougher for Microsoft, the Slacker, to be introduced in the summer of ’07, will allow users to receive satellite based content so they can get downloads where ever they happen to be. Another reason to choose the Zune over the iPOD would be Microsoft’s subscription media download service, Zune Marketplace. By paying a monthly subscription fee, users of Marketplace can have millions of tracks and videos at their fingertips without paying for each individually (That would probably be cost prohibitive for most consumers).

Apple claims consumers don’t want such a service, but industry analysts point out that it could be a viable option for some. For those that do prefer the subscription model, the Zune would become the player of choice. Analysts have recommended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash

e other WiFi enabled players on the market however, such as the SanDisk Sansa Connect. To make matters even tougher for Microsoft, the Slacker, to be introduced in the summer of ’07, will allow users to receive satellite based content so they can get downloads where ever they happen to be. Another reason to choose the Zune over the iPOD would be Microsoft’s subscription media download service, Zune Marketplace. By paying a monthly subscription fee, users of Marketplace can have millions of tracks and videos at their fingertips without paying for each individually (That would probably be cost prohibitive for most consumers).

Apple claims consumers don’t want such a service, but industry analysts point out that it could be a viable option for some. For those that do prefer the subscription model, the Zune would become the player of choice. Analysts have recommended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash

bscription fee, users of Marketplace can have millions of tracks and videos at their fingertips without paying for each individually (That would probably be cost prohibitive for most consumers).

Apple claims consumers don’t want such a service, but industry analysts point out that it could be a viable option for some. For those that do prefer the subscription model, the Zune would become the player of choice. Analysts have recommended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash

mmended that Microsoft use this as a way to differentiate the Zune from the iPOD, and increase market share. Another issue to put some speed bumps in Microsoft’s parking lot is the absence of a flash based Zune. Most other portable media player manufacturers have such a player, and many consumers prefer flash based players for their small size, battery life, and reliability. As flash based memory becomes cheaper and larger, a flash based player will all but become a necessity for the Zune.

All in all, the Zune could be a fantastic product for Microsoft. They should use the player to create a solid subscription service based business. Not only would they not be competing directly with Apple (although if it appeared to be successful, you can bet Apple would change their stance on subscription services), it would provide a fantastic recurring revenue base for Microsoft. Although they would not compete with Apple, they would be in competition with other subscription based services, such as Rhapsody. Microsoft recently released a software update to resolve some usability issues, and more functionality and features could be added in the near future via software downloads.

So, what can you play on the Zune and how do you get content for one? The thing that most consumers seem to love is that you can easily download music videos and TV episodes for a Zune. For those that just have to catch up on their favorite TV shows while taking the bus to school or work, the Zune’s just the ticket, thanks to its large (for a portable) video screen. You can download from Zune marketplace and play music files for free for the first three plays. You can also transport files over from other Zune players suing the built-in WiFi connectivity. One great application using the WiFi is the ability to stream content to and from an X-Box 360, which, in itself, is a media center extender for a Vista or Media Center Edition PC. The Zune supports WMA (natch!), WMA lossless, and MP3 file formats for music, and Windows Media Video and MPEG-4 for video.

For those who shirk at subscription fees, there are one time pay download sites out there. At these you can pay one