Microsoft Announces its Rival to Apple's iPod: Zune

On Friday July 21, 2006 Microsoft executives confirmed the launch of Zune, a music software and hardware product line that will rival Apple's iPod and iTunes.

In early June, Microsoft denied rumors that the company was developing a digital media player to compete with Apple's iPod.

However, In a statement released Friday, Microsoft general manager of marketing, Chris Stephenson revealed that the "new music and entertainment project [Zune]... will deliver a family of hardware and software products, the first of which will be available this year." (Source: news.com)

What is Zune?

Zune's initial hardware device will utilize a hard drive to store music files and will have Wi-Fi (wireless communication) capabilities. The wireless connection would allow users to sample, purchase, and download music files.

With Zune, users will have the ability to view others' music play lists and recommend tracks to download. Reports indicate that this capability may be extended to other devices such as cellular phones, PC's and Microsoft's Xbox 360. (Source: ipodnn.com)

Microsoft's Zune is touted by Stephenson as a "great opportunity to bring together technology and community to allow consumers to explore and deliver music together." (Source: news.com)

Breaking into the Market

Currently, Apple's iPod accounts for more than 50% of all digital music players sold and its iTunes Music Store tops online digital music sales with a 70% market share.

For Microsoft to achieve success with Zune, the company will have to find a way to tap into a market that is dominated by Apple. Experts believe that Microsoft must depend on more than the familiarity of its brand to achieve success in the online music market. Microsoft needs to show consumers that Zune is as easy and as fun to use as iPod. (Source: afterdawn.com)