A Race to Reboot

Zune
The available colors of three new Microsoft Corp. Zune portable media players that were announced Tuesday, Oct. 2, 2007 at Microsoft headquarters in Redmond, Wash. are shown. The large model at the bottom of the photo is an 80-gigabyte, hard-drive based model, and the others shown are 4GB and 8GB flash-memory devices. (Ted S. Warren - AP)

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By Mike Musgrove
Washington Post Staff Writer
Wednesday, October 3, 2007

Microsoft brushed up its Zune music-player line yesterday; Sony just updated its Reader device.

Will consumers care?

So far, shoppers have largely shrugged at the gadgets. People who want to carry their digital music with them still prefer Apple's iPod, which dominates the market.

And as for Sony's Reader -- which lets users download books and read them on a screen -- well, so far, people still prefer actual books, finding them easier to use and cheaper than Sony's $300 device.

Microsoft's Zune holds only about 3 percent of the music-player market. Sony's Reader device exists in a market so small that analysts don't even track it.

For Microsoft, the Zune is an ongoing attempt to steal some of the thunder of the iPod, which has 70 percent of the market. For Sony, a company that has struggled to compete in the portable-electronics sector since the Walkman was eclipsed, the Reader is an attempt to build a market from scratch.

Across the $148 billion consumer electronics industry, this is the beginning of the all-important holiday season. Manufacturers are rapidly putting out the freshest versions of their gadgets in the hopes of reaching a wider audience than they captured during last year's holidays.

To try to compete with Apple's latest iPods, Microsoft's new Zune will come with a touch-sensitive button that users can swipe their fingers over to quickly sail through their music collections. Online, users will be able to connect and check out their friends' listening habits through a social-networking feature called Zune Social. And Microsoft just announced that it is adding about 1 million songs that are free of copy-protection software to its online store.

Jason Reindorp, marketing director of the Zune at Microsoft, walked through the new features in a phone interview yesterday. "We're really positioning ourselves as the alternative to the iPod," he said.

Analysts are skeptical about whether this will be the Zune incarnation that starts to get traction in the marketplace, but they also expect Microsoft to keep trying, even if this Zune doesn't turn out to be the one that clicks with consumers.

"They know this market is a big market that won't go away," said Tim Bajarin, an analyst with Creative Strategies. He said the new Zune features aren't innovative enough to cause Apple much anxiety. "I think they're in it for the long term," he said of Microsoft.

The second-generation Zunes will be priced at $149 to $249. Video iPods range from $149 to $299.


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© 2007 The Washington Post Company

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