'Microsoft expects 1m Zune Sales By June 07': BBC

Discussion in 'iPod' started by shunpike, Dec 8, 2006.

  1. shunpike macrumors regular

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    Oxford, UK
    #1

    Here's the article:


    Microsoft predicts 1m Zune sales


    The Zune comes in three colours - brown, black and white
    Microsoft expects to sell more than one million Zune music players by the end of June 2007.

    The player has had a soft debut in the music player market in the US, with mixed reviews from consumers and critics alike.

    A report from market research firm NPD Group showed that Zune's share of the US digital music player market fell to 2% and fifth place recently.

    Great rival Apple has sold more than 70 million iPods in the last five years.

    A spokeswoman for Microsoft said the firm was not concerned that Zune player sales had dropped each week since its debut.

    'Overall growth'

    "While this is expected, our focus is less on week over week numbers, and more on the incremental sales that are leading to overall growth of the category," she said in a statement.

    Many analysts see Microsoft's Zune player as a first step in a long-term plan to compete with Apple, reflected in the US-only release of the player.

    The 30-gigabyte Zune costs $249 (£130) and comes with wireless technology that allows users to beam photos and songs to one another.

    Microsoft has said it plans to invest hundreds of millions of dollars to develop and market the Zune, and has acknowledged that the investment may take years to bear fruit.

    The company has taken a similar approach with its Xbox games division, growing sales and credibility in the market while initially having limited success against competitors.

    Discuss​
     
  2. psychofreak Retired

    psychofreak

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    London
    #2
    All I have to say is that if for some reason I wanted a non-iPod mp3 player, and it worked for mac, I would not buy a Zune, its just so cheapy at such a high price.
     
  3. notjustjay macrumors 603

    notjustjay

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    Canada, eh?
    #3
    :rolleyes:

    Reminds me of that Arrogant Worms skit.

    "How do we offer these fabulous deals?"
    "VOLUME!"
     
  4. D0ct0rteeth macrumors 65816

    D0ct0rteeth

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    #4
    So what I just read was..

    - The zune costs $250

    - they are hoping to sell 1 million of them by June 07 (250million in sales )

    - They are going to spend 100's of millions of dollars to market it to reach that goal (100 - 200million in marketing, thus maybe 50 - 100 million in gross profit)

    - manufacturing the zune costs money, and typical markup is maybe 20-50% (maybe 100 million profit margin, minus 150 or 200 million in marketing = (a loss of 100 million)

    So microsoft is going to lose money hand over fist on this plan, EVEN if they meet their sales projections. Obviously this doesn't count every salary, and every manufacturing supply chain purchase, and retailer cuts, and all that stuff.

    I guess we can officially say the zune is dead. and its not even christmas yet.

    But maybe I just dont get it - I dropped out of my MBA program. :)
     
  5. shunpike thread starter macrumors regular

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    #5
    The thing is Microsoft have the money to throw at the Zune... like they did with Xbox, so although like Xbox they make a massive loss, they keep the product as they can chuck millions of $ at it.
     
  6. yellow Moderator emeritus

    yellow

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    Location:
    Portland, OR
    #6
    1 million by June? That's what.. 2 fiscal quarters?

    Apple shipped 8,729,000 iPods in 1 quarter (Q4) according to their preliminary Q4 fiscal reports.

    oh noes, Microsoft! iPod Killer! :)
     
  7. echeck macrumors 68000

    echeck

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    Boise, Idaho
    #7
    I think Microsoft has done well with the Xbox because the console market was in a position where a newcomer could bounce in and steal a large chunk of the market. I don't feel this is the same with the mp3 player market right now.

    I see the Zune grabbing a niche market, anti-Apple folks and the like, but anything more than that I just don't see happening, especially after the next-gen iPods are released.
     
  8. PlaceofDis macrumors Core

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    Jan 6, 2004
    #8
    the scary thing is that MS can and will keep throwing money and its weight behind Zune. But then agian, its an even more saturated market than the console market. With consoles its easier i'd say to win a round than with MP3 players. its a bit more clear-cut and easier to develop and show where you're going, again not so with MP3 players.

    they will keep at it for a few years at least, who knows where we will be by then.
     
  9. Queso macrumors G4

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    Mar 4, 2006
    #9
    Microsoft are simply too late to the MP3 party. Apple have the lion share with Creative and Sandisk fighting it out for distant second. If anyone is going to change that status quo, it's going to be the mobile phone manufacturers.

    If the Zune had come out in 2003-04, then MS would have had the time to establish the brand and develop the product line. But that opportunity is gone.

    Had Ballmer not been running the show, they might have noticed that. He's the worst Tech CEO in my opinion. There are serious competitors chipping away at Microsoft on all sides, and all he can do is waste resources on dogs that have already left the traps.

    Great for Apple, Google etc., bad for Microsoft, its staff, and its shareholders.
     
  10. aristobrat macrumors G4

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    Oct 14, 2005
    #10
    Fortunately, lots of marketing and cheap prices doesn't always guarantee a "win". As someone else pointed out in another thread:

    Microsoft MSN never unseated AOL as the #1 provider of dial-up Internet access.

    Microsoft WebTV never took off.

    Their DVR (Ultimate TV) never really did anything to TiVo, and it (the MS one) had great reviews.

    Having said that, I think that Microsoft rushed the Zune to market so it'd be there before the holidays, and it shows. I wouldn't be surprised to see future units that are a lot more "likeable" (including improvements to the PC-side of it, and the online store).
     
  11. eyemacg5 macrumors 6502

    eyemacg5

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    #11
    Actually as a die hard mac user, I like the zune.

    Zune UK, May 30th is an aim.
    Mac/Linux software is being developed.
    I know no more, this is coming from my friends dad, who is a M$ employee
     
  12. stoid macrumors 601

    stoid

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    So long, and thanks for all the fish!
  13. calculus Guest

    calculus

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    Dec 12, 2005
    #13
    Maybe Microsoft could save all the hastle and just send us all some money. We could then buy an iPhone each next year.

    It would be a great result. We'd all be happy, Microsoft would not lose so much money and the world would not need as much landfill space.
     
  14. glennp macrumors member

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    Washington, DC
    #14
    They are just laying the PR groundwork: if the Zune manages to sell 1 million before June the headlines will trumpet "Zune Sales Exceed Expectations!"

    Just you wait :)
     
  15. yellow Moderator emeritus

    yellow

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    #15
    Terribly astute prediction. I like!
     
  16. Scarlet Fever macrumors 68040

    Scarlet Fever

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    #16
    In Maths at school i was taught that adding negatives made a negative.
    for example a $250 Zune makes say $20 loss. -$20 +-$20 = -$40

    M$ must be going on a new stream of mathematics here, if a loss which is sustained over a year can magically turn into a profit.
     
  17. yellow Moderator emeritus

    yellow

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    #17
    Which worked well for them with the XBox. However, in that case, they had a decent product that they've expanded upon. The Zune, however (IMO), is not a decent product.
     
  18. shunpike thread starter macrumors regular

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    #18
    but in a few years it could be...
     
  19. yellow Moderator emeritus

    yellow

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    #19
    Absolutely.. however, in the case of the XBox, it didn't take long for their Deficit=Profit scheme to pay off. I'm not so sure it'll work in the MP3 player market. They're up against some pretty stiff competition, and their lead off hitter is kind of poor, IMO. I thought I read somewhere that this was a 5 year strategy to turn profitable.
     
  20. shunpike thread starter macrumors regular

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    #20
    i agree the mp3 market is more complex than the game console market - however apple need to bring out their 360 before Microsoft do - this will guarantee success.
     
  21. clevin macrumors G3

    clevin

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    Aug 6, 2006
    #21
    so many confidant ppl predicting such such miserable demise of Zune, lol, who are u guys anyway? potential buyers? industry analyst with 2 years experience?
    wanna laugh at M$? post back in six month, lets see who is right, who is wrong. lol
     
  22. aristobrat macrumors G4

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    Oct 14, 2005
    #22
    Did I miss an industry analyst with 2 years of experience that predicted anything good about to happen to the Zune in the next six months? :rolleyes:

    Microsoft's had it's share of hits and misses. I don't recall any of their hits that started off as a misses, but as you pointed out, I'm hardly an analyst. ;) Well, an industry analyst. I am a systems analyst at work.
     
  23. clevin macrumors G3

    clevin

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    #23
    you better be, opinion without data backing isn't convincing in any way.:D
     
  24. aristobrat macrumors G4

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    Oct 14, 2005
    #24
    I know. That's what a lot of folks have been saying about your points for awhile now. ;) <ducking>

    FM and bigger screens have been on other MP3 players for years now and hasn't helped them out. Heck, other models have even had WiFi before. But here's hoping that those features will somehow make a difference for Microsoft none the less. There you go. Opinion and backup data all in one snide remark. :D
     
  25. clevin macrumors G3

    clevin

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    #25
    oh, whats my point?
     

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