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Microsoft ships its one millionth Zune ahead of schedule

Microsoft shipped its one millionth Zune MP3 player after nine months on the market according to Robbie Bach, president of Microsoft's Entertainment and Devices Division. The company had originally expected to top the one million mark in June, but the company achieved the feat a month early.

"We're very pleased with the progress. We've sold a little over a million Zunes. In the category we're in, the hard-disk-based category, we've got about 10 percent market share," said Bach. "It's a good start. It's not an overwhelming start. I'm not going to pretend it's some gigantic move."

Even though Microsoft shipped over a million Zunes, it's still well behind segment leader Apple which recently celebrated its 100 millionth iPod sold after nearly six years on the market. As of February 2007, the iPod commanded 73.7 percent of the MP3 player market. Microsoft's 2.4 percent share was good enough for fourth place behind SanDisk and Creative Labs.

Microsoft is expecting a rather large uptick in sales leading up to the 2007 holiday season. The company is building a new manufacturing plant in China which will produce a second-generation HDD-based Zune along with a flash-based Zune.

In the mean time, Microsoft is likely to add firmware updates to existing Zunes to further enhance their capabilities. New MP3 player entries on the market such as SanDisk's Sansa Connect offer wireless downloading functionality that many assumed the Zune would feature from the start.

"As to the Wi-Fi, we think the idea of these devices being connected where you want them connected is very important. That's why we shipped the original Zune with Wi-Fi built in, remarked Bach. "The cool thing about that is, the innovation can all be in software. Wi-Fi is an important area. We'll see how that SanDisk project does."

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By hughlle on 5/28/2007 2:33:11 PM , Rating: 2
despite it selling it's one millionth zune (is that selling or shipping though, a big difference) i am not aware of a single person i know owning one

RE: hmmmm
By Niv KA on 5/28/2007 2:38:26 PM , Rating: 3
Same here. More than that, none of my friends (most of us tech people) know anyone that has one, nor ever seen one. Maybe thats because I live in Europe (Belgium), but many of my friends visit the US on a monthly basis.

RE: hmmmm
By Samus on 5/28/2007 2:40:40 PM , Rating: 2
im the only person i know with one. mmmmm, brownies.

RE: hmmmm
By jcyeadon on 5/28/2007 3:10:19 PM , Rating: 5
I bought 2 of them which inspired my buddy to buy 1 as well. My sister wants one after she saw the one I got for my dad.

What stops me from telling everyone to go out and get one is the fact that there is this great hardware inside that is limited by the software. I want to share songs and not have software time it out. I can understand them doing it for protected song and albums but what about audio I create? and why not videos? I transfered home videos that I couldn't send to my dad last time we were within zune sharing distance.

Why can't I send it to his device via the internet or connect wirelessly to begin with. I am dissapointed and losing hope in the worst way. I am going to break this thing apart and curse microsoft's hardware devision if they don't release some good updates BEFORE they release a more capable version of the hardware.

Don't spit on the early adopters MS! I get plenty of use out of this thing but only because I know how to convert all my own videos. Why can XBOX offer videos but zune marketplace can't? You need to work the legal issues out. Are you waiting on me to offer an independant video service designed for content on the go? I'll do it if I must but I will take it upon myself as 3rd party to support Ipod video players and sandisk and all those others as well.

Why not update xbox360 to let me rent videos and download mobile versions? That way I can watch a video at lunchtime at work or (sitting on the toilet) Oh yeah like I am the only one who brings a zune into the can!? I watched Superman Returns entirely in 10 - 15 minute intervals for that very reason.. yeah yeah! new marketing direction.. buy a zune and learn to create your own ripped videos and even you can watch movies on any toilet, EVEN PUBLIC STALLS!

Before the new marketing direction though improve the software before my zune ends up inside the toilet.

RE: hmmmm
By Gul Westfale on 5/28/2007 6:05:12 PM , Rating: 4
hardware limited by software- isn't it always so?

look at the 2 xboxes: perfectly capable little PCs, but where are their web browsers? guess MS doesn't want them to have one since you could then simply bypass their "live" service, meaning you could bypass their subscription fee by not using live.

or look at the PSP: such a fantastic machine, a great screen, a good CPU, RAM, and storage options (i bought a 4GB stick for mine), and yet it's crippled until you install a custom firmware that actually allows you to watch movies at the screens' native resolution. the reason, i guess, is that sony wants people to buy movies on UMD (which do play at full res), but hen they offer only a handful of titles and sell than at near-DVD prices... you'd have to be an idiot to buy them.

and now you say MS doesn't allow the zune to do what it is capable of doing? i'm disappointed, really; but i can't say i'm surprised.

i hope one day these companies start listening to their customers rather than some market analyst/accountant/lawyer and give people what they want, maybe they would actually make more money that way because more people would buy their products then...

RE: hmmmm
By spluurfg on 5/28/2007 8:00:54 PM , Rating: 2
That's how it is though... the Supreme Court ruled that manufacturers are allowed to control the way their product is used to protect their model of sales. Take the case where 3rd party companies made replacement blades for single use razors -- they were barred from doing so, because the razor company was losing out on sales. Same goes for the extortionate prices for printer cartridges (now they're even region encoded for god's sake) to compensate for printers being sold at a loss.

RE: hmmmm
By Oregonian2 on 5/29/2007 2:55:45 PM , Rating: 2
Don't know what you're talking about. Third party ink for printers are abundant on the web and even in local stores. Even in major supermarket chains (e.g. - Krogers). There may be limits to what they can do to printer manufacturer made cartridges (is HP liable for failure of a cartridge refilled by a third party that leaks and ruins the HP printer?), but third party inks abound and AFAIK are all legal so long as they're not using mfgr owed patents w/o license (which is something true in all businesses).

RE: hmmmm
By Oregonian2 on 5/29/2007 2:58:14 PM , Rating: 2
P.S. - Single use razors don't take replacement blades. It'd be oxymoronic if they did. You just throw them away. :-)

RE: hmmmm
By HrilL on 5/28/2007 2:45:50 PM , Rating: 2
Yeah I don't know anyone that has one either and I live in the states. I haven't even seen people at school with them but I have seen all the others. Maybe one day I'll see one haha.

RE: hmmmm
By GaryJohnson on 5/28/2007 2:47:31 PM , Rating: 1
There's ~6.5 billion people in the world. If 1 million Zunes have been sold, then that means only 1 out of every 6,500 people own a zune.

In contrast, 1 out of every 65 people own an iPod.

RE: hmmmm
By wien on 5/28/2007 2:53:29 PM , Rating: 4
In contrast, 1 out of every 65 people own an iPod.
Umm, no. I think a few of those iPods have been sold to people already owning one.

RE: hmmmm
By retrospooty on 5/28/2007 3:39:24 PM , Rating: 3
not to mention many of the ipods have been made to replace defective ones. My son is on his 5th ipod nano (5 died in one year, each replaced by Apple), now the 1 year warranty is up and when it dies, hell have no replacement. Maybe a zune, or creative labs model next time.

RE: hmmmm
By GaryJohnson on 5/28/2007 3:52:22 PM , Rating: 3
That is one of many unknown variables that I did not mention in my original comment for the sake of brevity.

I was simply attempting to illustrate how it is reasonably possible to not know someone who owns a Zune given the statistics involved in the original article.

RE: hmmmm
By FITCamaro on 5/29/2007 7:43:54 AM , Rating: 5
I am proudly one of those 64 in 65 that don't own an iPod. Nor will I ever.

RE: hmmmm
By Munkles on 5/29/2007 3:21:55 PM , Rating: 2
Must be a different market because I know 4 people with them. They all love the thing, perhaps wishing it was thinner/lighter.

I dont personally own one, but Im seriously considering getting one once the limited run Halo editions come out.

Microsoft is doing the smart thing here
By Treckin on 5/28/2007 3:49:34 PM , Rating: 3
I know people with Zunes... I live in Silicon Valley, so maybe that makes the difference. I myself have eyeballed them, but honestly, I'd rather stick with the IPOD.
Microsoft is doing the intelligent thing here; with the all dominating Apple owning the Music player market, Microsoft understands how hard it will be to break into it. That is also the reason behind them waiting out SanDisks wireless protocol feature.
Why blow billions on trying to enter a market that is dominated by another company... The IPOD has become a click icon... ins vogue, and has become a part of many peoples daily lives. Socially, its a self-reinforcing monopoly - people see people what their friends have, and they want one to.
Unfortunitly, Microsoft had two possible approaches to the Zune -
1. The one they took - Slow and easy. They are trying to edge into the market slowly. This attempt is low-risk
2. The approach they took with the Xbox - Spend billions on development, and jump feet-first into the frey, and instantly capture an enormous market share.

I think someone got cold feet at MS. I believe they could have had a similar strategy with the Zune as they had with the Xbox.

RE: Microsoft is doing the smart thing here
By Pirks on 5/28/07, Rating: -1
RE: Microsoft is doing the smart thing here
By Treckin on 5/28/2007 4:58:44 PM , Rating: 1
You are an idiot. It was the original Xbox I was talking about. Where did you read that I was referring to the 360?
I was referring to the break into the market by Microsoft, which had been dominated by Nintendo, Sony, and previously Sega. What is your problem? Next time you feel like saying something online, just ask god to relieve you from the burden of your mental handicap. Go get a life.

RE: Microsoft is doing the smart thing here
By Treckin on 5/28/07, Rating: 0
RE: Microsoft is doing the smart thing here
By SigmaHyperion on 5/28/2007 5:35:19 PM , Rating: 2

"It released a few months before the PS2"

Bzzt. The Xbox launched almost a FULL YEAR AFTER the PS2.

"It destroyed the Dreamcast,"

Wrong again. Sega announced it was pulling out of the market 9 months before the Xbox even launched.

"and pushed the Nintendo 64 out of the market."

One would certainly hope so. Once again, the Nintendo 64 was replaced by the Gamecube BEFORE the Xbox even launched.

Now, perhaps you meant "Nintendo" in general, but even that would hardly be a true statement, as the GameCube and the Xbox sold almost exactly the same number of consoles.

RE: Microsoft is doing the smart thing here
By Treckin on 5/28/2007 6:02:40 PM , Rating: 1
Sure. I got my dates wrong there; I was purely relying on memory of the actual events. In any case, it doesnt alter the state of my point.
X-box was not the underdog to the PS2.
Microsoft spent billions coming into an already fiercely competitive market, and hopped right on market share.
And the point being, that their lack of market share is not surprising, as this was not their strategy entering the digital portable music player market.

By Treckin on 5/28/2007 6:03:30 PM , Rating: 2
with the Zune... its not surprising with the zune...

RE: Microsoft is doing the smart thing here
By Pirks on 5/28/07, Rating: -1
RE: Microsoft is doing the smart thing here
By Treckin on 5/28/07, Rating: 0
RE: Microsoft is doing the smart thing here
By SigmaHyperion on 5/28/2007 10:00:17 PM , Rating: 2
That "initial" marketshare that peaked at about 19% took MS FIVE YEARS to earn.

Zune adoption is really not [i]that[/i] much different than Xbox adoption. It's just that the Zune has started so far behind the curve. When the competition had probably more than 100 million units already on the market before you got there, penetration takes a while on a percentage basis. Sony had a headstart with the PS2 too, but not NEARLY to the extent that Apple had with the iPod.

RE: Microsoft is doing the smart thing here
By FITCamaro on 5/29/2007 7:51:18 AM , Rating: 1
Nobody paid attention to the original Xbox but it shipped millions of consoles? The only reason the Xbox didn't do as well as it could have is because developers weren't on board with it like they should have been.

That's why Microsoft got its next gen console out of the gate first. It all comes down to who's out first for less money. A greater user base equals more titles. Look at the landscape today with the 360. Games that were once Sony exclusives are now being made for both. If MGS4 comes to the 360, then Sony will only have the Final Fantasy series left. But even Final Fantasy XIII has already been announced as no longer a PS3 exclusive.

The original Xbox may not have been as big a success as the PS2, but it also came out what 2-3 years after? By then the PS2 was already throughly entrenched in the marketplace.

I will tell you this though. I used my Xbox far more than I ever used my PS2. I still use my Xbox as a media center. My PS2 goes largely unused unless I fire up FFXII since I still haven't beaten it. And me and my friends never got together to play PS2 games. We got together to play Halo.

By jadedeath on 5/29/2007 11:47:37 AM , Rating: 2
Perhaps you just don't get it, perhaps you can't read what experts have to say on it, perhaps you're just ignoring facts.

Either way MGS4 will NOT be going to the 360. The developer himself said that there's NO WAY that MGS4 would be able to fit on a DVD9. Neither will Final Fantasy, again rumor, not fact.

Just because you listen to internet rumors and believe in them so, will not make it true.

You used your Xbox more than your PS2? Great, that's a wonderful story really, I've used my PS2 more than my Xbox, what exactly is your point?


By Pirks on 5/29/2007 11:54:20 AM , Rating: 1
hehe, and now ppl get together to play wii sports and such - a New Trend, wow

just kidding

about Xbox - yes, you're right, MS was late to market just like with Zune. this is why Xbox was the underdog compared to PS2 and this is why Zune is the underdog compared to iPod. because iPod was much earlier to market too.

this is the kind of clear and obvious logic that gets downmodded on this forum, then Treckin calls you moron. I tell ya - this is the main feature of DT, I'm really surprised when such clear and logic posts as mine do not get downmodded and called all sorts of names by local DT clowns :-)

sales to vendors
By m104 on 5/28/2007 2:53:15 PM , Rating: 5
from what ive heard microsoft measures these sales numbers by how many units have been sold to vendors - so its not actual sales to ppl

RE: sales to vendors
By melgross on 5/28/2007 3:24:39 PM , Rating: 2
That's the question. Are they measuring this they way they are measuring Vista sales, which is to say "shipped", rather than sold to the end user?

Having said that. One of my daughters friends bought one. Another one recently bought one as well. Most all the rest have iPods.

I think it is a bit of a backlash to everyone owning an iPod.

RE: sales to vendors
By zerocool84 on 5/28/2007 3:29:27 PM , Rating: 2
It says in the opening title that it is units shipped not sold so yea 1 million people do not even won them yet.

Buying a fourth
By bdojack on 5/28/2007 4:41:30 PM , Rating: 2
I bought a Zune for my wife at Christmas and she loves it. Both kids have one. I get one next. We like the Zune marketplace.

RE: Buying a fourth
By Pirks on 5/28/07, Rating: 0
RE: Buying a fourth
By bdojack on 5/28/2007 5:39:37 PM , Rating: 2
We never owned Ipods. The salesperson at Best Buy told me Ipod was just an "image" thing. He said Ipods were not that good compared to some MP3 players. So I purchased an MP3 player (Samsung), for myself, based on Consumer Reports. My kids had a bad experience with Sansa MP3's so we paid the extra and have been quite satisfied with Zune. The kids at school thought my kids' Zunes were cool, and they wished they had one. They said their Ipods did not do nearly as much (whatever that means). I don't know how Zune Marketplace compares to the iTunes store. I picked Zune because of the large storage capacity and Microsoft brand.

RE: Buying a fourth
By Pirks on 5/28/2007 6:30:45 PM , Rating: 1
Hey, thanks for an informative answer. I feel that your reaction to Zune might be quite different had you experienced iPod and iTunes store before. Never listen to sales people, they often talk total bs just to sell you something. He deceited you on iPod being purely image thing - it's actually very far from truth. Oh well, guess you may try it out later, and compare it to Zune - you may as well change your opinion then. Anyway good luck with your MS stuff... I like Creative Zens more 'cause they have replaceable batteries and do not require special software to get music transferred, it's "plug and drag player", I like this easiness very much. I heard Zune is not like that, you have to sync it or something... anyway, enough offtopic ranting for today :-)

RE: Buying a fourth
By kmmatney on 5/28/2007 9:18:54 PM , Rating: 2
The Ipod isn't an "image" thing - it actually offers very good value for money - at least that's what I felt when I bought my 8 GB nano, which has been bulletproof. The other brands weren't any cheaper, nor were they built as sturdy. I've never used the Apple store, though...

RE: Buying a fourth
By Tides on 5/30/2007 3:53:06 AM , Rating: 2
I like the Zune Marketplace as well. The thing that sold me on the Zune was the all you can eat monthly subscription pass. It was a toss up between Sansa players (at the time they didn't have that new wifi/internet radio player) with the Rhapsody subscription; or the Zune which had a video screen and some other cool features. That was probably the hardest choice I made, because I really am a fan of Rhapsody's service. Zune's software is clunky and I seem to find a few more cd's I want on Rhapsody's service... but I'm happy with the Zune purchase.

Shipped. Not Sold.
By Saist on 5/28/2007 6:11:18 PM , Rating: 1
I see a lot of comments here treating the Zune like it has passed the one million mark sold.

It hasn't. Read the story again. Microsoft has SHIPPED 1 million Zunes. There is no mention of how many actually made it out of a warehouse.

RE: Shipped. Not Sold.
By theapparition on 5/29/2007 8:05:29 AM , Rating: 2
Imagine that your a manufacturer of widgets. You then ship your widgets to stores. Do you do that for free? Or do the stores pay you for your shipments?

It's an old argument and it's still quite stupid. Microsoft is not in control of the retail sales, the only metric they have is on the units that they have sold (or otherwise shipped) to retailers.

M$ said they would sell 1 million not ship
By mondo1234 on 5/28/07, Rating: 0
By akugami on 5/28/2007 5:25:10 PM , Rating: 2
10% of the HD based DAP sales in the time period that it was released. Basically a little spin. Obviously if you count up total DAP sales, even factoring in a 10% defective rate, the Zune has nowhere near an overall 10% market share but the statement, in the correct context, is not false either.

It's also not factoring in flash based DAP's which do quite well since they're generally cheaper. The market is practically flooded with cheap one to two gigabyte flash based DAP's. To be fair, MS doesn't currently have a product in this category but I'm sure that a remedy is in the works.

In the time period that it was released, it "sold" about 10% of the hard drive based digital audio players sold in that time period. It's still likely they're fudging the numbers and quoting shipped (sold to vendors, not yet to consumers) rather than actual sold to consumer numbers.

This is something Sony (and MS) is notorious for when reporting sales of it's games consoles. You'll often see the discrepancies in numbers between a reporting firm like the NPD numbers for console sales and the number quoted by the company in question. On the one hand, they're not really lying as they've sold it to retailers, but on the other hand it might be sitting in said retailer's warehouse for weeks and not in the actual hands of consumers.

You just have to get used to the marketing speak when reading stuff coming out of the mouths of big corporations.

Thats it?
By Armorize on 5/28/2007 8:36:44 PM , Rating: 2
Let us all take a moment to laugh histarically....................................... ................................................... ................................................... .......

ok now that thats over with. Thats just ridiculous, to anyone who owns one... im sorry. Hooray for unlimited mp3 shares... wait... u dont get that... M$ could do alot better... seriously they took a nice product and turned it into a worthless hunk of plastic and silicon. 2 million mark will be some time in 2010.

By Lemonjellow on 5/29/2007 12:06:07 AM , Rating: 2
My younger cousin who works at Best Buy bought a Zune...
I messed around with his for about an hour one day, and basically found it to be pretty useless for my needs yet still impressive as a not quite swiss army knife of portable media. I still haven't embraced the video iPods fully either, yet. I just can't get past my dislike of little screens. I've never used any online music store so I can't comment on those, but I did find it rather hilarious when he went to show me some audio or video that he had gotten shared from another friend's Zune and it was past the limit.

I'm sure it probably has it's place somewhere out there in the consumer world, but for me, personally, I'm just going to stick too yee ol' 4 button iPod that's still kicking and screaming after 5 years of abuse (downright AMAZING isn't it? It even charges nearly to full battery) until I can splurge and purchase a newer model. Might just replace it with a Nano. Hell They are pretty much to the point where they are the same capacity as my 4 button (10 gig 4 button model, I was cheap in 01/02, ok I'm still cheap, but!), but 1/4 the size, lol...

RE: ...
By Pirks on 5/29/07, Rating: -1
"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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