As Zune Goes on Sale, Microsoft Says iPod Can Be Tamed
A customer at Best Buy in Marin City, Calif., inspects Microsoft's Zune digital music player on its first day on shelf.
(By Justin Sullivan -- Getty Images)
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Wednesday, November 15, 2006
Microsoft Corp. can break the dominance of Apple Computer Inc.'s iPod in the digital music market with the Zune player that went on sale yesterday, chief executive Steven A. Ballmer said.
"We can beat them, but it's not going to be easy," Ballmer said in an interview.
Zune is Microsoft's first product in the $4 billion U.S. digital music market dominated by the iPod. Microsoft marked the release with free concerts by rapper T.I. and the rock group Red Hot Chili Peppers.
"The market will have two big players for a long time, us and Apple," Ballmer said. "Obviously we're the David in this one; Apple's the Goliath."
Zune sells for $249.99 in the United States, the same price as an iPod with comparable storage space, and will compete with video iPods released in September. Microsoft, trying to promote Zune as a social experience, added an FM radio and the ability to beam songs from one device to another.
Microsoft may struggle to win sales. Apple has sold more than 67.6 million iPods since chief executive Steve Jobs introduced the device in 2001, including 39.4 million in the past year.
"They're not going to take a lot of share from Apple," said Matt Rosoff, an analyst at Directions on Microsoft. "If they get double-digit market share overall in a year, they'll be very pleased."
To match Apple's song selection, Microsoft had to give Vivendi SA's Universal Music Group a cut of Zune sales, an offer it has now extended to other providers of music tracks for Zune.
Challenging the iPod may be tougher than it was for Microsoft to break Sony Corp.'s hold on the video-game console market, said Microsoft Vice President J Allard, who leads the effort to sell Zune.
"Apple has this halo around it where they can do no wrong," Allard said. "People could see Sony failing."
Apple spokesman Steve Dowling declined to comment.
