Zune: when will the hurting stop?

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Update: Just about as I was clicking “publish,” CrunchGear published an “as definite as tips can be” tip that Microsoft plans to release a Zune-branded phone by the end of 2007 (presumably with a better name than “Zunephone”). The plot thickens!

Another Update: Microsoft employees: if you see this could you drop me a note and let me know what tool(s) you’re using to track brand? It’s impressive (and a little scary) how little time elapses between my publishing a Microsoft-related post and you guys hitting the site.

It’s nice to have something to fill the void that was created in my life when the SCO debacle got dull — there are only so many ways one can say “yep, they’re still circling the drain,” after all. But just six weeks have passed since my last Zune post, and already so much has happened…

Microsoft has officially jumped on to the Zunebox bandwagon: according to Microsoft’s business chief Chris Stephenson, the company is planning on working with retail chains to provide “filling stations” for the Zune. Let’s repeat that, shall we? They are planning on working with retail chains. As in, “haven’t even gotten far enough into the process to have anything at all to announce about it.” *

Meanwhile, Starbucks announced a couple of weeks ago that the chain will be rolling out music download stations in its stores in 2007 or early 2008. What with Starbucks already being tied up with the iTunes store, and two separate announcements from Microsoft and Starbucks, I don’t think it’s Zuneboxes that will be sitting next to the jars of biscotti, and that doesn’t bode well for Microsoft. By the time Zune “filling stations” arrive on the scene, it’s likely that either (a) the public will have reacted to opportunistic music downloads with an indifferent shrug, or (b) Microsoft will be perceived as playing catch-up. Again.

“Aha, but wait,” you say, “the Zune’s ‘filling stations’ will be able to take advantage of ‘the social’ — they’ll be able to use the Zune’s sharing capability to try out songs, which could be huge!” Well, that leads us into the next recent black eye for the Zune.

Right now it’s looking like you’ve only got about a 58% chance of being right about sharing being a useful selling point. In addition to the “3 plays or 3 days” limitation on listening to shared music, the labels got another little carve-out: an apparently significant number of songs that just can’t be shared, period. Excuse me now, while we take a little break for a special note to Microsoft:

Look — I understand that you needed to launch with access to a library of music that was at least roughly comparable to iTunes, but come on…couldn’t your lawyers get the labels to give up anything? The pitch for your launch was the ability to share music: did you really think that no one would notice that they couldn’t share a significant percentage of the music that was sitting on their Zunes?

Good to have gotten that off my chest. Moving right along, we come to another little difficulty that the Zune franchise has run across in recent weeks.

The iPhone. [Cue dramatic music.] The sluggish launch of “the Zune” has largely overshadowed the fact that Microsoft sees “Zune” as an ecosystem of interrelated offerings, not the specific PMP that was released a couple of months ago. I’m sure that Redmond would have been overjoyed to have an immediate hit, but they’re looking at the longer term.

The thing is, though, when Steve Ballmer said “In five years are people really going to carry two devices? One device that is their communication device, one device that is music?” last March, I suspect that he had checked the weather report for Hell, found that it was still hot and sunny, and taken that to mean that Apple’s real multi-function offering (yes, the Rockr just doesn’t count) was still a gleam in Steve Jobs’ eye. Oops.

So Microsoft gets to play catch-up. Again. Whenever the Zune-family phone/PIM/PMP/Web device finally hits the street, it’s inevitably going to be another round of “so how does this thing compare to Apple’s offering” in the press. At best, Microsoft will have to accept that the release of the Zunephone will lift Apple’s boat along with their own. At worst? Oh, I don’t know…say, another round of Zune launch puff pieces gone horribly, horribly wrong?

Yeah, if I were Bryan Lee I’d be taking some time to pursue personal interests, too. Microsoft isn’t out of the game by any means, but it’s going to be a brutal couple of years for the Masters of the Zuniverse.

Note: To answer the questions that are (no doubt) running through your minds at this very moment:

  • Yes, the zunebox proposal site got a surprising amount of traffic from Microsoft’s corporate netblock.
  • No, I don’t actually believe that I’m the only person in the world to have thought of this, nor that Microsoft ripped off my idea, man — it’s just fun with server logs.