Zune Thoughts - Daily News, Views, Rants and Raves

"Windows 7 passed the 5% market share milestone last weekend, which put it, if only temporarily, above the total market share of all versions of Apple's Mac OS X, a Web measurement firm said today. Last Saturday and Sunday, Windows 7 powered an estimated 5% and 5.14% of all computers that were online those days, according to Internet metrics vendor Net Applications. The two-day average of 5.07% was higher than the 5% of the market that Net Applications said Apple's operating system averaged for the week of Nov. 15-21."

This is a welcome reality check. I know that Apple has tremendous mind-share because they spend an ungodly amount of money on prime-time TV advertising telling us how much Windows "sucks", but at the end of the day only 5 out of 100 computers on this planet are Macs running OS X. The market share for Windows that same week was 92.64%. The numbers say a lot - and no amount of reality-distortion field spinning is going to change that. Macs might be the perfect computing solution for some people, but they're not a mass-market product, no matter how hard the Mac faithful want to believe that.

There's also a weird reality distortion bubble in the media - many people in the media/blogging tech world use Macs. A far higher percentage than the rest of the world; just look at figure 2 in this article. I don't know whether it's techno-savvy people who got sick of Windows, or the uber-geek's desire to try the next shiny and new thing, but at many tech events I'm in the minority using a Windows laptop. At that Mobius event OS X had 53% market share; in the rest of the world, 5%. Funny things can happen when you get a bunch of Mac users in the room: they think their platform always matters, even when it doesn't. Sounds harsh, right? Let me explain. Read more...

"NPD numbers are out again, and in the harddrive MP3 player category, Zune has the number two spot, with 9.9% of the market in January. Also, the Zune Marketplace subscriptions user base grew by 60%, with individual ZMP downloads increasing by 65%. It's also worth noting that Zune is sold in more retail outlets than NPD currently reports on: for example, Amazon (which actually only accounts for a very small percentage of Zune sales), Wal-mart, the club stores - Costco and Sam's aren’t reported by NPD, and some others. NPD also doesn't report on the Apple Stores, where Zune isn't sold, (obviously ;). So the actual market share might be different, but to report on the category, we’ll stick with NPD."

It's interesting to see that the Zune is holding onto the #2 spot for hard drive-based players, denying that nay-sayers the ability to say that the numbers from the first month were a fluke. 9.9% is a good number for a brand new product, but it also underscores the fact that the Zune needs to get a flash version out into the market because the real big numbers come with the sale of the Nano, Shuffle, all of Sandisk's products, and others. I wonder, how well can the Zune team execute in parallel? With some markets, such as Canada and the UK, expected to get the Zune later this year, is the Zune team focused on that or will we see the US market get its first flash-based player before other places in the world get their first Zune at all?

Two random quirks for the day related to the Zune that I thought it were funny. First, I was browsing Amazon.com and chuckled when I saw this:

Apparently the Swiss Army Ranger Pocket Knife is the real market share winner! Next, I was on another Zune site and the Google AdSense ad that came up sure promised a lot:

10 billion downloads? Even if you combined every commercial song and movie ever released, I somehow doubt you'd hit 10 billion. For some reason, I just don't trust that ad... ;-) Have a great weekend everyone!

"New research by JupiterResearch, a leading authority on Internet and emerging consumer technologies, forecasts that although growth rates for US sales of dedicated MP3 players will slow dramatically. However, according to the report, as the market moves beyond early adopters who purchase multiple devices and upgrade regularly, the user base will steadily increase from 37 million in 2006 to over 100 million in 2011. "Apple shows no signs of losing momentum, having conditioned customers to expect and adopt regular upgrades, as well as defined targeted use cases with optimized functionality," said Michael Gartenberg, Vice President & Research Director at JupiterResearch. "Despite the coming of Zune, the return of closed-loop digital music service-device combinations, and music phones on the horizon, the iPod should not lose significant market share in the next 12 to 18 months.""

As much as I like the folks at JupiterResearch (Michael Gartenberg is a gentlemen and a scholar), sometimes analysts say the silliest things - largely because it's their job to make grand predictions about the market, and sometimes (especially in the short term) their predictions come across as obvious. Even if you had the ultimate media player product - let's say something 10x better than the iPod in every way, with 100 hours of battery life and a telepathic interface - the iPod juggernaut has so much momentum that nothing is going to stop it short term. That's just the way it is - but the Zune is a long-term, platform play, so as long as the Microsoft team has the guts to stick it out and not expect anything more than single-digit market share over the next couple of years, the slow but steady growth will win a good chunk of the market in the end.