Ina Fried over at CNet has the scoop on the reorganization of the Zune team, which would now be split into two groups. From her post, this is how it will go down:
The software and services portion of the Zune team–the bulk of its staff–will be added to the portfolio of Enrique Rodriguez, the vice president who currently runs Microsoft’s Mediaroom and Media Center TV businesses. The hardware team, meanwhile, will now report to Tom Gibbons, who also leads the hardware design efforts within Microsoft’s Windows Mobile unit.
Clearly, the positioning of the team provides a lot of clues as to the future of Zune. It’s not going to be in the player itself, and this is probably a smart move. Zune has not taken off, and is well behind even other Apple competitors in the space.
Microsoft is wise to leverage its strengths elsewhere — in this case the mobile and multimedia segments of the electronics industry — to generate some interest in Zune. Of course Rodriguez is not saying that the Zune player itself is no longer its focus, but lets not beat around the bush, the writing has been on the wall for some time.
Redmond needs Zune to be profitable, especially in economic conditions such as what we’re seeing these days. Investors have little tolerance for companies that aren’t making money, or wasting it on wild goose chases.
Whether the Microsofties like it or not, thats pretty much what the Zune effort has been up until now.