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Catching up to Apple will require a lot of time and money says Microsoft

While Microsoft plans out its Zune strategy, Apple's ongoing success with the iPod and iTunes continue to grow on a daily basis. Analysts are expecting that Microsoft's new Zune portable media player will be an iPod-killer, but Microsoft says it's not going to be easy. During a financial analysts meeting, Microsoft president of Entertainment and Devices Division Robbie Bach said "we think of this in the hundreds of millions of dollars of investment. It is something that is going to take time. This is not a six-month initiative."

Despite the strong hold Apple has over the online music market as well as the portable media player market, Microsoft says that it's confident about gaining significant market share. The company recently said it would be spending a few hundred million to drive marketing and sales for its Zune brand. Interestingly, Microsoft will also be taking on its long time partners once Zune launches. Instead of directly competing with Apple, Microsoft had used a partnership approach, hoping that other third party vendors would help it grab market share for Microsoft's PlayForSure initiative.

Bach told reporters that despite the eminent launch of Zune, its partnership program will still continue. "PlayForSure continues as it is today," said Bach. "We're not just introducing Zune to do the same thing other people do." According to Bach, Microsoft is laying out a long term plan in excess of three years. In fact, Bach said that it may take up to five years. "We have to drive a new brand: Zune. We have to drive people who think about iPod as the brand to think about other things."


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Don't forget about accessories
By rklaver on 7/28/2006 6:04:42 PM , Rating: 3
I think what will be hard to break from Apple is the number of iPod accessories that are out. Not armbands and crap like that. I'm talking factory installed car stereos like VW and BMW and Mini offers, not to mention Kenwood, Alpine and all the other who have iPod ready devices. Then there is the DRM. If people have a boat load of iTunes music, what then?




RE: Don't forget about accessories
By Vertigo101 on 7/28/2006 6:10:50 PM , Rating: 1
If people have a boatload of iTunes music, then they deserve to stick with Apple.


By Mojo the Monkey on 7/28/2006 6:21:13 PM , Rating: 4
I think it would be helpful if you resisted the temptation to be condescending to people who are using iTunes. For many people, that service provides a very appealing product. With the exception of monthly-service options, I would estimate the 95% of consumers purchasing from iTunes dont know of viable alternatives. This point has been covered in this, and every other forum, ad nauseam. A consumer who listens to almost all of their music through an ipod is not necessarily making a mad decision when shelling out $3.00-5.00 to own every desirable song of a new album at very reasonable quality. (at least for them). Its easy to pick on the "popular" trend.

Anyhow, more on topic: I think Microsoft really stands a chance if they can offer something more in terms of integration with Windows. If these devices can be set up to download all of my email, cached pages, or other media, any time i am within my wifi network, they may really appeal to the consumer who doesn’t quite need a PDA. This will be an interesting launch.... or at least lets hope it will be. We all benefit from competition.


RE: Don't forget about accessories
By soydios on 7/28/2006 6:28:20 PM , Rating: 3
If people have a boatload of music purchased from the iTunes Music Store, then Microsoft will let them download the same songs from the Live music store (what are they calling it, Urge?) for free. Source: http://www.dailytech.com/Article.aspx?newsid=3183&...


RE: Don't forget about accessories
By Orpheus333 on 7/28/2006 6:35:38 PM , Rating: 2
I dont get that whole M$ re-buys the music thing. I mean, If a person paid for the right to use a song, such as a song from itunes, why is apple such a nazi about what the buyer does with it?

You're not buying the music, but the right to listen to it...why not in any format you choose? Can anyone explain? shouldn't M$ just be able to release a program to convert everyones itunes format to mp3? the people paid for the right to listen to the song, didn't they?



RE: Don't forget about accessories
By michael2k on 7/28/2006 7:51:52 PM , Rating: 3
Apple a Nazi?

Apple "invented" the current DRM use model:
Multiple computer playback
Multiple portable playback
Unlimited CD burn
$1 price per song

People paid for the "right" to listen to the song:
1) On up to five computers at a time
2) With the ability to stream music to another computer
3) And the ability to upload to as many iPods as you wish
4) As well as the ability to burn as many CDs as you wish
5) And finally the ability to make as many backups as they wish

If they want to move the music to a Zune product, it is allowed under Apple's use model. Just like it isn't Sony's problem when you want to rip a CD into iTunes, it isn't Apple's problem when you want to import an iTunes song into Zune.


RE: Don't forget about accessories
By PrinceGaz on 7/28/2006 8:16:40 PM , Rating: 2
That's all well and good, but how about they allow us to listen to the music we have purchased without any restrictions whatsoever, and play it on an MP3 player that doesn't support Apple's DRM without the quality loss and inconvience of burning to a CD and ripping as an MP3?

Are Apple paying you to post here? No sensible customer would prefer music with restrictions on what they can do with it, but that is what iTunes offers.

When will the RIAA and the record companies themselves realise that we are going to copy stuff no matter what they do, just like we did in the 1970's and 1980's with what was then considered quality home hi-fi equipment. I despair that most people in those comapnies are probably around my age, but fail to grasp the reality of today's world.


By PrinceGaz on 7/28/2006 8:24:17 PM , Rating: 2
Just to follow up my point about music copying in the 1970's, my father routinely swapped LPs (12 inch vinyl records) with his work colleagues, and also borrowed them from a library with a music section, and recorded them on chrome tapes with Dolby B noise reduction-- using a tape-deck with level-controls, meters, and assorted switches.

It may not have been a 1:1 copy, but the chances are they would have been at least as good as they 128kbps AAC you get from iTunes.


RE: Don't forget about accessories
By psychobriggsy on 7/28/2006 9:25:07 PM , Rating: 2
I wonder how restrictive the DRM would be without Apple's reasonably relaxed settings? Remember it is the music companies that mandated DRM, so you should be bitching at them.

How is the DRM for music purchased from Sony's store? How about the music purchased from any PlaysForSure compatible store? How about the store that will be coupled with Zune? It won't be even more relaxed. Zune indeed looks like it wants to tie in users even more than the iPod/iTunes combination.

The one thing that Apple should do is offer songs in a higher bitrate than 128kbps. Even 192kbps would make a major difference in quality. However for most people 128kbps is good enough.

You're also not forced to buy from iTunes Music Store.

The only good thing is that Microsoft will give you access to the same songs that you'd bought from iTMS for free. Of course, without this their product would be far less desirable, so it's not really being done out of the goodness of their hearts.

Sadly DRM mechanisms are the 'formats' of the digital age. No longer is it 8 track vs vinyl vs cassettes vs CDs, it's Fairplay vs PlaysForSure vs SonysProprietaryDRM vs Zune. Sadly we'd all hoped that the digital age would get rid of the crap format wars, but there's a lot of money in formats, it was a naïve hope really.


By michael2k on 7/28/2006 9:37:10 PM , Rating: 2
quote:
That's all well and good, but how about they allow us to listen to the music we have purchased without any restrictions whatsoever, and play it on an MP3 player that doesn't support Apple's DRM without the quality loss and inconvience of burning to a CD and ripping as an MP3?


Except you didn't pay for unlimited restrictions. You bought an AAC, and to play it on an MP3 player you have to go through a quality loss ANYWAY. Every other format has restrictions, why do you single iTunes and Apple out for different treatment?

I am not arguing for preferring music restrictions, but for reasonable fair use. You mentioned your dad making 1:1 copies... likely there was transfer loss and encoding loss, then playback degradation, as well as the inconvenience of transcoding from vinyl to tape.

Apple has introduce a format that suffers NO transfer loss nor playback degradation, and the encoding loss is determined by the user on what format they use to transcode. The process of transcoding from AAC to MP3 is also lightyears ahead of what your dad was able to do.


quote:
When will the RIAA and the record companies themselves realise that we are going to copy stuff no matter what they do, just like we did in the 1970's and 1980's with what was then considered quality home hi-fi equipment. I despair that most people in those comapnies are probably around my age, but fail to grasp the reality of today's world.


The digital era is totally different than years past. In years past you could not search entire libraries, gigabytes of files, from thousands of miles away, and copy in fractions of a second. You had to manually network, play, link, copy, and transcode. Each era has it's hardships.

If we copied stuff like we did in the 70s or 80s, we would be burning the AAC to a CD and ripping it back in a high fidelity format, or playing it out line out and re-recording to a high fidelity format. We would be mailing each other burned CDs and borrowing iPods from each other.

However, today IS different, and instead we have BitTorrent and iTunes Library sharing and KaZaa instead.


RE: Don't forget about accessories
By AmbroseAthan on 7/28/2006 11:17:29 PM , Rating: 2
Can I play tunes I download from ITunes in Winamp? And since when is it possible to directly move a product downloaded on ITunes to another portable music player (non-Ipod, such as Zune)? Did I miss this random openning of the DRM?

Guess the current Apple DRM model isn't as user friendly as you make it out to be. (and yes, I could burn & rerip to do this, but I am talking about from the initial download).


RE: Don't forget about accessories
By Wolfpup on 7/29/2006 8:29:04 PM , Rating: 2
This is *AGAIN* a completly moot point, as Apple's DRM is *LESS* restrictive than Microsoft's. Not to mention you don't need to use the iTunes music store just because you have an iPod. I don't, and never would.


RE: Don't forget about accessories
By rklaver on 7/28/2006 8:53:53 PM , Rating: 2
It's interesting that Apple is being labeled as Nazi's for a DRM (I know, it drives iPod sales) yet no one has labeled the record companies for being nazi's. They are the reason we have DRM's.

In the eyes of the RIAA you didn't pay for the right to use the song, you paid for the right to listen to it and only you are allowed to hear your copy.
<sarcasm> Give it time, they will sue someone for overhearing somebody elses purchased music, </sarcasm> :-)


RE: Don't forget about accessories
By Hare on 7/29/2006 6:21:33 AM , Rating: 2
quote:
I dont get that whole M$ re-buys the music thing. I mean, If a person paid for the right to use a song, such as a song from itunes, why is apple such a nazi about what the buyer does with it?
I'm sure that Apple has nothing against binding the consumer to their store but seriously. If you want to blame someone blame the record companies. They are the biggest reason for all the DRM crap.


RE: Don't forget about accessories
By Weaselsmasher on 7/29/2006 5:35:59 PM , Rating: 2
Apple is not the "nazi". (Godwin's law officially invoked here) You have zero clue about what Nazis really are.

Anyway, you should research a few things. It's not Apple's choice to have DRM, it's the record labels. No DRM == no legal music downloading on any kind of scale (sorry, garage bands recording through the mike input of a SB Value Live don't count for much). The fact that Apple DRM is so much less invasive than Sony's rootkit DRM is because Apple fought hard for it. On YOUR behalf, whether you choose to recognize that or not.

As for Microsoft breaking iTunes DRM... that's illegal. Not that it would stop Microsoft, but you DO realize that you're now actually trying to say it's OK for Microsoft to violate others' intellectual property rights? I thought that's part of why Microsoft was the bad guy... unless, of course, theft, copyright violation, patent infringement and cartel practices are OK when they benefit YOU.


RE: Don't forget about accessories
By Garreye on 7/31/2006 8:36:01 AM , Rating: 2
quote:
As for Microsoft breaking iTunes DRM... that's illegal. Not that it would stop Microsoft, but you DO realize that you're now actually trying to say it's OK for Microsoft to violate others' intellectual property rights?

Microsoft isn't going to break iTunes DRM, they are going to allow you to re-download the song you purchased with iTunes for free, which of course will likely have MS DRM on it...


RE: Don't forget about accessories
By rklaver on 7/28/2006 6:50:41 PM , Rating: 2
Money is money no matter who's offering it, and I can see a car company going with something with some sort of style over a company that's known for making an OS. Which by the way I have yet to see a windows boot screen on a stock auto. I somehow doubt windows is running my nav system. Now I probably would steer clear of a auto running windows(pun intended)

Rumor is that the PC will search for iTunes DRM protected songs, then re-download them, for FREE.

Come on now...Realistically do think the RIAA will allow that? Or do you think MS will eat that one too? Even so the RIAA isn't going to allow MS music service to be DRM free, otherwise it would completely undo every lawsuit and every message it's been trying to send out regarding piracy. So what you end up with is...another iPod like device with a...DRM.


By Weaselsmasher on 7/29/2006 5:30:02 PM , Rating: 2
Yup. If people own LEGAL downloads, then they deserve to stick with a company whose products WORK.


RE: Don't forget about accessories
By creathir on 7/28/2006 6:25:17 PM , Rating: 1
As far as the integration, you have got to be kidding me right?
If you were a car manufacture, and two companies were offering you MONEY to add "ports" to the cars for your devices, which one would you chose, the Microsoft backed one (the same company that is getting its OS on the onboard computers of these cars) or Apple, the little company that could?

I'd pick Microsoft, just because of name recognition, not to mention the DEEPER pockets.

As far as the DRM issue, if the rumors are true, this is not an issue. Rumor is that the PC will search for iTunes DRM protected songs, then redownload them, for FREE. There goes the "DRM issue". The only thing that can stop Microsoft, is quality of the product. If the ease of use is greater than that of the iPods, and the quality of the product as far as workmanship goes is greater, many will flock to the Zune player in droves, just to have the new "it" device. (Think of the average iPod user now...)

Zune could be a very worthy adversary for the iPod. Hopefully it will live up to the hype.

- Creathir


RE: Don't forget about accessories
By Hare on 7/29/2006 6:23:30 AM , Rating: 2
quote:
I'd pick Microsoft, just because of name recognition,
Eh. You think Microsoft has better anem recognition than iPod or iTunes when it comes to attaching portable music players to your car. Get real...


RE: Don't forget about accessories
By Hare on 7/29/2006 6:23:57 AM , Rating: 2
anem -> name. (too early and no coffee)


RE: Don't forget about accessories
By chaosrain on 7/28/2006 7:16:00 PM , Rating: 2
Correct me if I'm wrong here, but one of the additional money makers for Apple is the licensing of the iPod connector. They're more than happy to see the market flooded with accessories as long as they get paid for access to their proprietary (and patented) data/IO port. By extension, this means that VW, BMW, Mini and others are paying for the privilege to add iPod docks to their assembly line vehicles.

Should Microsoft offer access to their proprietary data/IO port at significantly lower rates (or for free), I believe many manufacturers (both automotive and MP3 accessory) would be happy to recoup the money they spend to license access to the iPod connector in favor of a free interface.

Also, I thought I had heard rumors that Microsoft was considering not only offering access to their connector interface for free, but was working to universalize the interface in order to allow Sandisk, Samsung, Rio, et. al. access to the same interface, effectively making the interface something like the ubiquitous USB (maybe they will even call it UMP3). If they go that route and create an MP3 data/IO interface that is free for all, Apple will begin to fall out of favor with Belkin and Targus as no one wants to pay for something they can get for free elsewhere.


By Burning Bridges on 7/29/2006 4:46:47 AM , Rating: 2
I see.

Soooooo

someone with an ipod will see that a car doesnt have an ipod connector, and will rush out and buy the zune? Ahhhh, makes perfect sense.

And that is assuming the manufacturer makes the following judgement :
"I will use what is cheaper, not what is more in demand"
Which is most unlikely, as you don't see many cars running lawn mower engies (cheap) they all have big block hemis (in demand) :-)

And, knowing MS' track history, do you really think they would make anything available for free? Be it connector or otherwise, I have to say I doubt that one too.


By Weaselsmasher on 7/29/2006 5:40:46 PM , Rating: 2
quote:
By extension, this means that VW, BMW, Mini and others are paying for the privilege to add iPod docks to their assembly line vehicles.


Incorrect. You can license something without having to pay one penny, if the license-holder so desires. Apple may well be charging zero to the car manufacturers... they simply need Apple's permission. Whether that involves a cash transaction is an entirely separable matter.

And even if they are paying a license fee... those iPod connectors aren't being given away free by the car manufacturers. They charge the car-buyer more (either as a line-item accessory.option or rolled into the base price of the car), so it's a profit-center for the car manufacturer.

Don't shed any tears for BMW over this. They're crying all the way to the bank.


If anybody can do it..
By IMPoor on 7/28/2006 6:44:52 PM , Rating: 2
Microsoft seems like one of the only companies out there that could actually be a real threat to the ipod. They have the money and as this report points out they are willing to spend it just to break into the industry. The fact that they realize it could be 3-5 years before they get an even market share with the ipod shows that they are positioning this in the same way that they did with the Xbox. They spend a ton of money, loss a ton of money, but break into the industry. Then several years later they have a product that is holds a serious market share. ie:xbox to the xbox360. Its a good plan if you are rich enough. Bottom line is that they need to make the Zune easy to use as well as their online music store. As long as they can do that in a couple of years the zune will be a serious player in the portable entertainment market.




RE: If anybody can do it..
By psychobriggsy on 7/28/2006 9:33:54 PM , Rating: 3
Sounds like they're leveraging a monopoly position to me.

In the console market it was acceptible - Sony was also selling their console at a loss initially to increase marketshare.

However Apple aren't taking a loss on the players with an aim to recoup it on music sales. Neither are any of the other hardware manufacturers. If Microsoft come in with a subsidised player it could do some damage if it's half decent. And by damage, I mean that in 10 years time you'll have one choice of player from one company, with strong DRM, at high prices, and all the lack of innovation that results in. Right now the market might be dominated by the iPod, but at least there's competitive alternative players, and they drive Apple to continually improve the iPod as well.


RE: If anybody can do it..
By cgrecu77 on 7/28/2006 10:16:19 PM , Rating: 2
what monopoly, they don't even have a presence ...


RE: If anybody can do it..
By cgrecu77 on 7/28/2006 10:19:40 PM , Rating: 2
it would be unfair and maybe illegal to sell at a price lower than manufacturing, but they are not, it's just that the big marketing costs will not be covered by the product sales. By your reasoning GM is doing something very illegal since they losing money since forever ...


RE: If anybody can do it..
By Burning Bridges on 7/29/2006 4:49:35 AM , Rating: 2
quote:
maybe illegal to sell at a price lower than manufacturing

wtf bbq?


By KeypoX on 7/30/2006 10:07:02 PM , Rating: 3
Ipod sucks




Wii?
By hoppa on 7/28/2006 11:42:08 PM , Rating: 2
I read this as "Wii will take years to catch iPod," and was really confused as to what the hell Wii had to do with iPods.

What the hell is a Zune anyway? What a terrible name.




Microsoft good at marketing
By INeedCache on 7/29/2006 10:02:01 AM , Rating: 2
Microsoft is very good at marketing, and I wouldn't sell them short in this venture. As for the so-called analysts, I'm not saying they're wrong in this case, but sometimes they don't exactly have their finger on the right pulse.




The world changes
By FXi on 7/29/2006 12:50:11 PM , Rating: 2
DRM is too restrictive, in most of its current forms (commonly used/sold ones). Putting aside quality of copy issues, the current restrictions are vastly more restrictive than in decades past. It's not an unconnected issue that music makers and producers are listed in the ranks of the richest folks in the world. This isn't a problem from one party's side and it is from the consumers side.
Apple didn't really have the clout, and didn't bother to try to change that very much. They pushed a little, got some consents but didn't push much. The economics of the music industry, and even the video industry, are going to change. It will take time and they won't give up peacefully, but it will change. They've entered into a battle that they simply cannot win. It might take another decade or two, but much like wireless cracking now, ordinary folks will walk around with the equivalent of a roomful of computing power now, picking up and cracking on the fly what we can't picture now. Do I do any of this? No. I don't download, nor do I Ipod, but I know what's coming.
Apple, however, is its own monopoly. Don't think the handful of other players out there actually stand a chance. They mildly brush on keeping Apple honest, but they dont' change its pricing, nor do they really effect how strong Apple's DRM is. So before you say Microsoft the big monopology is going to hurt little Apple, just remember this is a neighborhood park, and when Apple isn't getting picked on by someone bigger, Apple's been doing plenty of picking on everyone smaller than it. Turnabout is fair play. Let's see how it goes, shall we, Apple?
Leaving the smaller world of music players and moving to overall general corporate recognition, Microsoft is a more widely recognized name than Apple. Apple is no slouch however. But you can bet money that if Microsoft backs an interface and set of accessory interactions with a device it backs, there will be thousands of companies standing in line to back up that interface. Will it stick? Will they keep after the market? Probably, but they've given up seemingly lucrative markets before. We'll have to see on that one. But even Sony who's name is worldwide and widespread in many markets, doesn't joke when it comes to Microsoft coming to the table as a competitor. Don't think Apple will compete on name alone. They try to do that, and they're done for.




What company?
By bozilla on 7/28/06, Rating: 0
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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