Zune Portable Media Player Unveiled

The first Zune device, officially unveiled in Sept. 2006 after months of rumors, will be a fairly straightforward portable music player with some unique features, such as the ability to transfer material between devices wirelessly. By concentrating on performing a few core functions well, rather than overburdening the device with features, Microsoft hopes to establish a strong position among portable players while leaving room for expansion. However, the company’s decision to create an entirely new digital media system, including playback software and an online service, could spell tough going for some of its existing digital media partners.

Why Microsoft Created Zune

Microsoft’s decision to build a portable music player and associated online store, after years of leaving these markets to its Windows Media partners, was spurred in part by the runaway success of Apple’s iPod and iTunes Music store. The iPod consistently hovers around 75% market share for digital music players, and the iTunes Music Store, with more than 1.5 billion song downloads and more than 80% of the market for legal music downloads bolsters Apple’s position because content purchased from it cannot be played on any other portable device. Left unchecked, Apple’s continued dominance would hamper Microsoft’s overall home entertainment strategy, which promotes the Windows PC and other devices running Microsoft software as the best tools for creating, storing, editing, and playing audio and video content.