Why Zune is starting to gain traction

Microsoft still has a long way to go, to catch up with Apple, or even SanDisk in the portable mp3 player market. Since their big update, there have been significant changes, but they still don't quite match up to the iPods. However, Microsoft's plan is a good one, and it can help them gain some significant market share over time.

There are 2 things that make Microsoft stand out, and is probably going to help them gain more market share.

1) Their new update was made available FREE to all existing Zune users. This means that they will build a lot of customer loyalty and expand their customer base. Unlike the way Apple does things, Microsoft has decided that they will approach this by not significantly upgrading the new Zunes, and instead adding new software features that will be fully compatible with the old Zunes. This was made possible because the original Zunes were made to be Wi-Fi capable, even though that wasn't very useful back then. Now that they have improved their Wi-Fi usage in their networking and new options for downloading/streaming music, all their Zunes can enjoy these features. It's always a hard decision when you are thinking of whether to leave behind the old users and bring new and better features to your device, or keep your existing customer happy by making the features available easily to them. Apple generally has left the customer int he dust by forcing them to get new devices for the new updates, or forcing them to pay extra for it. An example of this is with the release of the new iPod touches where you either have to get the devices, or pay $10 if you are currently using V 1.9. For Microsoft, they gain another advantage by making these new updates available to existing customers. Since many of their features involve using the network and sharing with other users, it makes sense that by expanding their customer base, they make these features better.

2) Subscription Music is something that Microsoft seems to stand alone with, although some might say that it is one that doesn't really help much. I find that with subscription music before, they were really limited in music options. However, this new update definitely improves that feature, by making it far easier for users to find music they like. There are now channels that users can use to find new music related to the genre, or that the Zune thinks they will like. These channels provide regular updates to keep up with the public tastes and new songs. It definitely can give users many more songs that they may never find otherwise. Along with the channels, there is also the Buy from FM feature that really adds to the potential of subsciptions. A study sponsored by Microsoft showed that radio stations still account for a large part of users finding new music. If Microsoft can expand their subscription music options further, or to make more music available through subscription music, then it can certainly attract many new customers and help to further improve their networks by bringing in more users and new music.

The Zune will not skyrocket in market share overnight, and even Microsoft said themselves that it would take years to seriously compete with the iPods. What Microsoft should be doing is use more of their resources to first overtake SanDisk and build up their customer base. If they can continue to make good decisions about whether to leave users behind or making updates available easily, then they will be well on the path to gaining more market share.

Tags: music, Zune, Microsoft, Apple, iPod, Mp3, portable players, BlitzTech Blog

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