Could a "free" Zune compete against iPod?

Wouldn't Microsoft have to sell the Zune to somewhere other than the US for this to work? :P

Yeah You Wish!!

You guys are always good for a laugh! The iPod holds a great market share. It's a great product. But all the Apple Fannies come out of the wood work to defend when they're threatened. Microsoft will gain ground. IE, Xbox, Windows. 'Nuff said. When they want something they go after it and will get it. At one time people said Netscape would never lose much market share. Now it's just a bad webportal. At one time people said Xbox would never work. Now it holds significant market share. And at one time Windows was a glimmer in Bill's eye. Now there are 3 versions all ahead of Mac OSX in market share and 2 more right behind.

Maybe Apple will give away iPods, too. Don't hold your breath, though. Apple gives away nothing without a lawsuit. Go out to their website and check out software and find 10 free pieces of software not offered by a 3rd party and not in beta. Then go out to Microsoft. They offer so much free software (many trials, many updates, many useful utilities (like virtual pc 2007), and more). None of it 3rd party. I don't see any free virtual machine software from Apple. Do you? Free Apple iPods. That's funny. Apple is big on $ and short on freeBs.

You are getting so fired up about a first generation product. I can't wait until Microsoft comes out with #2!

Eric Chu. (#10)

Even if you do raise your market share by buying it, it still doesn't work if the product is unprofitable. That is, net of the billions of dollars you threw/are throwing away to attain the market share.

I don't think so.. microsoft is waaaay behind. and they lack on very important thing.. the one thing that will never allow them to compete with apple.. the coolness factor.. the sleek, smart, sexy design that apple builds all there products with. just look at the zune. it's bulky and ugly. apple is stylish. it always has been, and I believe it always will be. its their culture!

#19: I like your analysis. Thanks for taking the time to write up your comments.

I have one question and that's regarding the 2nd to last para where you mention NPD data and one Zune per store...where did you ever dig up that piece of news?

Incidentally the MS fanbois are going wild with news, predictng the imminent demise of the iPod. Trouble is, each of the 250 MS fanbois already has a Zune so what good is it to them for it to be given away now?

Oh, and what's the "free forced university users" comment about? I'd like to read more about that as well!

Thanks again for some good food for thought.

Well, here's why it wouldn't work and the market is about 2 million users (not counting the "free" forced" university signups):

1) It's clear that offering cheaper monthly (Yahoo) does not bring them that many new users and the free SanDisk player hasn't brought in that many. Sure, MS' marleting is a little larger but how successful will it be - not by much. Why?

MAIN PROBLEM

2) You drive your brand value to ZERO - when you yourself think your product is worth "nothing," no consumer will either. You are forever stuck in that rut. Not a problem for cell phone companies because they are NOT giving away their own phones, they are giving you and telling you Moto, Nokia, samsung, LG phones are worth ZERO to about $49 dollars - what do they care. They treat them as disposable and how do you treat phones - as disosable (obviously the iphone will try and introduce a think different but that's another issue).

It should also be pointed out that MSN tried this to the tune of a $4 BILLION dollar writeoff and losing to AOL ... but hey, that's a whole 'nother division.

3) Cell phone giveaways are also different in that what you going to with a cell phone with no service? Nothing. A Zune is different. All you need is a cahrger & headphones - you don't EVER have to use "the network." Sure, that might require some hacking or illegal activity but for a free $200+ player, how many hackers will come out of the woodwork? Or simply cancel your credit card and sell the hard drive inside. What a deal. The cost of policing this will be in itself a whole department.

3) The only way for Ms to protect itself is to charge you 18 month, 2 years of "service" and rebate you $10 bucks a month or whatever but you have to pay $250 upfront (rounding down quite a bit) but you get it all back! will be the selling point - yeah, if people aren't going through the hurdle of subscribing to music, how many people want to deal with checking MS is refunding them $10 bucks a month (or of course, scary version - MS will refund you 15 MS cribbit Live points)? AND you have to program your own tracks - why not just start a band - that would be hella easier than the MS player - why not just send people the parts to? Sign up today for $300! Build a player. Spend hours making playlists! We'll send you $10 dollars a month - in two years, you own a Zune! What a deal!

4) You know there is no way MS will let you use a "free" player without streaming you ads every 15 minutes.

Will MS do this? of course, what do they care about selling you office for $999 and turning around and plowing it into giving away $200-$300 to make literally pennies on the dollar!

The only good that will come of this will be watching MS fanboys suck MS clean and whether this program can be shut down in 6 hours and how big the writeoff will be. Right now, MS will take a good 15 years to wither away but this should hasten MS's cash flow and demise by a good 2-3 years so let's literally pave our driveways with Zunes!

Based on NPD data that they are selling about about 1 Zune per store - anything will be an improvement in clearing the shelves ... though it will contribute nothing to their bottom line.

Shareholders - you have to ask yourself the Ballmer WTF?

Steve Dale: I like where you;re going with that.

Remember columbia house/BMG deals back in the day?

"12 CDs for 1 penny!!!*"

*requires 36 month subscription and purchase of at least 6 more albums at at an incredible mark up.

Basically, I pay a subscription fee, but get to buy and own the music.
My biggest complaint of the sub scription services is you don't get anyhting at the end.

They already have a season pass for TV shows, why not Download Plans?

Although I doubt the Zune will ever truly beat the iPod, I have never thought that it was _no_ competition for the iPod.

Although i totally agree about the Zune ads.... "Welcome to the Social" Embarassing to think about it, really.

Eric,

IE doesn't cost Microsoft much of anything to give away.

It's software. They can make a million copies and delete them in a blink of an eye if they wanted too.