Microsoft could launch Zune in Europe by end 2007

CANNES, France (Reuters) - Microsoft corp. (MSFT.O) is happy with the early sales of its Zune music player in the United States and it could launch the service in Europe before the end of 2007, its marketing director said on Saturday.

Jason Reindorp told Reuters that Microsoft was realistic about the challenge it faced in trying to crack into the digital music player market, dominated by Apple Computer (AAPL.O) Inc.'s iPod.

"You couldn't get a more entrenched competitor," he said at the annual music industry Midem Net conference in France. "But we feel really good about the first steps that we've taken."

Reindorp said Microsoft was not yet ready to officially announce when it would launch the service in Europe but it could possibly be out before the end of the year.

"The industry moves in this sort of Christmas to Christmas cycle. So you can expect that there will be more devices, more features in the market at that point," he said.

"Our next round of introductions will probably be in time for the holiday of this year."

He said Microsoft planned extensive research with focus groups in Europe to see how it could be modified for a European consumer.

He said the Zune had a 10.2 percent market share in the U.S. in the 30 gigabyte category, according to the latest data, and that it was still in line to sell over a million units by June 30, the end of its current fiscal year.

"We're not simply trying to play catch up with Apple," he said. "We are very realistic, we have what is essentially a three-year plan to firmly and solidly get on the radar.