New Zune Player Will Face Tough Market

More types of Microsoft Corp. Zune music players are in the works, but some analysts are unsure whether new form factors or functions will significantly boost Zune's popularity. Microsoft sees three main categories in the sector, and all of them are important as the company develops new Zunes, said Chris Stephenson, general manager of global […]

More types of Microsoft Corp. Zune music players are in the works, but some analysts are unsure whether new form factors or functions will significantly boost Zune's popularity.

Microsoft sees three main categories in the sector, and all of them are important as the company develops new Zunes, said Chris Stephenson, general manager of global marketing for Zune. The three categories include higher-end video players, mid-range music-centric devices such as the iPod Nano and low-end USB devices such as the iPod Shuffle, he said.

"We think of [the Zune] as a broad entertainment offer that is driven by music at the moment," he said. "We will start to play more aggressively in a broader number of categories." The current Zune is just the "tip of the iceberg," he said.

In the next month or so, Microsoft plans to reveal more about its vision for the future of Zune, he said.

One analyst isn't so sure that a very low-end version of the Zune comparable to the Shuffle will help. "I don't personally see that as something the Zune should do next," said James McQuivey, an analyst at Forrester Research. "Zune should first worry about getting a base of users of both flash and hard drive versions before experimenting with little companions." He said most users of Shuffles buy them essentially as companions to a larger iPod.

However, Microsoft could plan on selling such a lower-cost product as a way to quickly boost its user base "so no one counts them out," he said.

The Zune is currently a distant second in portable music player market share, behind Apple.

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