Thursday, July 27, 2006

MP3 player: Microsoft throws its hat in the ring

Microsoft has decided to enter the portable media player market (mostly MP3 currently) with Zune . I must admit the news caught me by surprise. Why portable MP3 market and why now? I think there are three reasons:
  • Microsoft believes that the portable media market (music and movies) has become lucrative enough for it to focus its resources. Microsoft has rarely if ever been a trendsetter. Instead its strategy is to go after an established market and then ruthelessly compete to achieve dominance in the market. Anyone remember Netscape? Or Lotus 123? Or WordStar for that matter?
  • Secondly, while the portable market can certainly grow the incumbents (Creative, IRiver, etc) are unable to displace Apple from its dominant position. It can only take a behemoth like MS with its warchest and resources to change the landscape of the MP3 market. In fact the biggest losers from MS's entry will be the smaller players such as Creative and IRiver.
  • Ever since MS came up with X-Box their strategy is to diversify. While X-Box may not be making any money now I think its a long term bet which will pay off. Its a great product and they have done a great job with X-Box Live.
So, should Apple hide for cover? Or should it welcome competition which could only help in further growth of the market? The answer to this questions is not simple and Apple needs to wait and watch. MS is not revealing all its cards.

Final thoughts on Zune
To really dislodge Apple MS needs to offer more than just an MP3 player. Here are few things that will be on my wishlist
  • Will I be able to use Zune as an X-Box controller? It will be neat if I could use it to play games when not using it to listen songs.
  • Will it have Wi-Fi capability? I shouldnt have to download songs on to it if I am using it at home. It should be have Wi-Fi capability to allow me to listen to a playlist that I have created on WMP
  • Will it support movies? It will be really cool if MS provides a connector for TV that can be used to see movies stored on the Zune on Television.
Its too early to say anything about Zune, here's what the prototype looks like. The coming months will be interesting.
BTW is Google working on GTunes and/or GPod? Let me know if you come across any information.

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