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Can the Zune survive in an Apple dominated Market?

So before all of you start going off talking about the Zune, I want to let you know I actually own one. I have the 8GB (Red) 2nd generation Zune and I like it a lot. The new Zunes put up some welcomed competition to the market stiffling iPod. Though there are a lot of things I like about the iPod, I'm not a big fan of iTunes. I also considered a Zen (creative), in case you were wondering, but I bought a Zune.

Anyway, The Zune is an MP3 player made by Microsoft in attempt to take some of the portable music player market share currently held by Apple. The 1st and 2nd generation products have been good, but have failed to draw any attention away from Apple's moneymaking iPods and iTunes Service. While the Zune players and Zune Marketplace would have some features missing from the competing Apple players, they have several problems on their own. For example, Zunes have abbuild in FM tuner that is missing from the iPod, but curiously lack compatability with playforsure services, like MSN music (curiously enough). Also, the recent update to the Zune software, also called Zune, tried, and I believe succeeded, in simplifing the interface and making the software a little more friendly. However, while updating the software they dropped several features from the old version, angering some and confusing many. So, the new Zunes are a mixed bag, but are still able to provide an overall positive experience for most customers (like me).

The biggest problem with the Zune is not with the unit itself or the software. The real problem with the Zune is that it lacks the well developed ecosystem of its main competitor. CES '08 demonstrated the million dollar industry of iPod accessories. The Zune, with its much smaller user-base, has no such ecosystem. Looking for a nice speaker dock for your Zune? Too bad! Thinking an arm band would be great with your Zune? Tough luck! With the Zune you're limited to a small selection of overpriced first party accesories. That problem is partly Microsoft's fault but it is partly because no third party is going to make accessories for a device until someone is there to buy them.

That is the irony of the Zune. The tagline of the Zune marketing campaign from the begining has been, "Welcome to the Social". The Zune supports a horribly DRM infested music sharing feature that allows you to send a song to you friend so they can listen to it three time. Though it might be fun in a bus full of High Schoolers, you would never be able to try it. If one of those high schoolers owns a Zune, I assure you, that would be the only sad lonely Zune owner in a world of iPods. The new Zune update also launched a social site where zune owners can have friends and track the listening habbits of their friends and even hear sample tracs of their friends most recently played songs. It is a great idea, not even every Zune owner has signed up with the site, so good luck to anyone trying to find Zune friends. Its not that a single Zune, on its own, isn't functional, but the social effort has failed.

So, does the Zune have a chance at competting with, and possibly overtaking Apple? I believe it does but there is a lot of work to be done. I would suggest a few things to Microsoft to push further into Apple claimed territory:

-Lower the Price- For $249 I can get the 80GB iPod Classic, or the 80GB Zune. If Microsoft wants to draw customers away from apple a price cut is the easiest way to do it. They're already losing money, why not go for broke?

-Expand the Zune Marketplace- It is good and the quality is better, but the selection is no where close to iTunes. It also only has music where iTunes has TV, Games, and Audio Books.

-New Features on the Zune Hardware- The iPod Nano has TV out, why not the Zune 8?

-New Features on the Zune Software- Why no automated playlists?

Those are my suggestions to Microsoft. If I were a betting man, I would wager Microsoft to eventually abandon the Zune, but that isn't coming soon. If you want a alternative to Apple, like I did, it is still a good choice. The player and software are quite good. If you love Apple, then I don't know that I have a convincing reason for you to change, and that is the real problem that Zune needs to overcome.

My Amazon Zune Review