Microsoft Zune

Introduction

Microsoft Zune was a constellation of products and services created as a beachhead in the market for digital entertainment dominated by Apple’s iPod and iTunes. It was launched on November 14 2006 that consisted of both the hardware (player) and software (Zune Marketplace). Zune provided a variety of digital entertainment services such as a line of portable media players, digital media player software for Windows PCs, a music subscription service known as a "Zune Music Pass", music and video streaming services for the Xbox 360 game console via the Zune software, music, TV and movie sales, and desktop sync software for Windows Phone.

From company’s perspective, Microsoft’s ultimate goal was to make Zune the centre of an entertainment ecosystem built around its products. With Zune, Microsoft has attempted to win some market share from Apple by creating an integrated handheld, PC and Web ecosystem. From customers’ perspective, Zune was just an MP3 player with functions very similar to the dominant market player iPod that was launched 5 years ahead of it.

Key Players

Based on NPD’s report in January 2007, Apple has dominated the market with 72.7% of the market share, followed by SanDisk at 8.9%, and Microsoft’s debut at just 3.2%. Zune was launched when the market was already saturated with iPods and Apple started shifting its focus on mobile phones and tablets.

Description Product Year of Launch Market Share (2007)

Apple • Computer, electronics, and software makers

• Well regarded for design and ease of use

iPod 2001 72.7%

SanDisk • World-leading supplier of flash memory data storage products

• Partners