Microsoft’s Move to Axe Much of Zune Line Risky

Zune HDMicrosoft is going full-bore when it comes to the Zune HD, due out in stores September 15. Redmond apparently believes so much in the product that it is willing to axe the entire line to focus on the device, if reports from Paul Thurrott are to be believed.

Now Mr. Thurrott does not necessarily have the best track record in being accurate in predicting or reporting future Microsoft moves, but if he’s actually talking to executives you have got to think they aren’t blowing smoke. If true, it’s a pretty gutsy move on Microsoft’s park to put all their eggs in one basket.

[UPDATE: Microsoft has now confirmed that the original Zunes are dead. See this PC World story.]

Even though Apple seems to be focusing on touch as of late, the company still carries an expansive line of models to suit users tastes. Simply put, a one-size-fits-all approach doesn’t work well in this market.

Apple’s Shuffles and Nanos work good for athletes — look no further than the Nike+ add-on for the Nano as evidence. For Microsoft, the Zune 8 fufilled this niche. With it gone, the company is forcing users to upgrade to the much larger (and about 2 1/2 times more expensive) touch-based model.

In Microsoft’s defense, we all shouldn’t forget though how much ground the Zune needs to make up. Even though this latest round of Zunes sold slightly better, there is still a 20-25:1 ratio of iPods sold to every Zune  Microsoft is focusing its efforts where the market is going.

Regardless, a large portion of the market will be underserved. Many consumers prefer smaller and cheaper players (anecdotal evidence seems to indicate this may be a fairly large chunk of all players sold). I can understand Microsoft’s desire to focus on the Zune HD, but deciding to axe the rest of your product line before you have any alternatives seems way too risky for a platform that is hanging on by a thread so as it is.


9 comments

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  1. Shawn Roberts September 2, 2009 at 8:02 am #

    Could you provide a little more detail to support your statement that Mr. Thurott does not have a great trackrecord in predicting what Microsoft is going to do?

    Thanks

  2. Daniel September 2, 2009 at 9:35 am #

    Not “where it’s going”, as has been the case with MS for a long while, “were it’s at now”. MS core philosophy has never been one to aim “where the puck is going to be” but rather “where the puck is at”, and because of this they will always be behind.

  3. tom b September 2, 2009 at 10:14 am #

    “Could you provide a little more detail to support your statement that Mr. Thurott does not have a great track record in predicting what Microsoft is going to do?”

    I’m not sure Mr. Thurott can tell his left foot from his right foot. The man’s an idiot. Have you ever read his articles?

  4. NanoGeek September 2, 2009 at 10:21 am #

    According to PCWorld, Microsoft has confirmed this story.

  5. tom b September 2, 2009 at 10:39 am #

    “According to PCWorld, Microsoft has confirmed this story. ”

    Kind of ironic, because MSFT built its whole empire (Windows) on picking up customers more interested in saving $50 on their computers than in having a tolerable computing experience. Here, they’ve tried to shoot for the higher end. This won’t end well for them.

  6. Tim F. September 2, 2009 at 11:14 am #

    I wouldn’t necessarily read this as confidence in the Zune HD. Remember they recently gutted not only the Entertainmnet division but the Zune group as well. It just might be a matter of practicality to admit the skeleton crew they have can handle one device and they are resetting for another potential build-up IF it proves successful. That’s a bit different than confidence.

  7. Ed Oswald September 2, 2009 at 12:28 pm #

    Good point Tim. I just think starting your “new” line at $219 is eliminating far too much of your potential consumer base before you even start. There has been no indication that we’ll be seeing smaller capacity/cheaper Zunes yet — I’m going to ping my own sources and see if there’s something we’ve all been missing here.

  8. Tim F. September 2, 2009 at 4:38 pm #

    Ed, I don’t think you’re missing anything… Microsoft is.

  9. Simon September 3, 2009 at 1:21 pm #

    The Zune is a failure and Microsoft are basically axing it and starting again. The story is as much that they are sticking with the brand as dropping a complete range of models.