Zune Lands at Retailers

Microsoft's first direct response to Apple's iPod, the Zune media player, has launched at U.S. retailers for $250.

Microsoft’s Zune media player officially goes on sale at U.S. retailers today for $250. The handheld devices are available in three colors—black, white, and brown—sport a three-inch LCD screen, music and video playing capability, a 30 GB hard drive, a built-in FM tuner, and a built-in Wi-Fi wireless capability which, for the time being, is restricted to Zune-to-Zune music and photo sharing and cannot be used to connect to the Internet or share other data. The Zune is somewhat larger and heavier than iPods of equivalent capacity, but they do offer a larger screen, FM radio, and wireless music sharing —and, of course, the Microsoft brand name.

Reaction to the Zune amongst the industry has been mixed. In launching the Zune, Microsoft has turned its back on its own PlaysForSure initiative, launched in 2004 to create an multi-vendor ecosystem of mutually compatible music players and music stores. Instead, Microsoft has embraced Apple’s iPod/iTunes product model, integrating the Zune player with the Zune Marketplace, which sells songs from independent and major labels for 79 Microsoft Points apiece—yes, the same Microsoft Points gamers can spend in Xbox Live Marketplace. (A $15 subscription plan is also available.) Moreover, the Zune isn’t compatible with the digital rights technology Microsoft has built into Windows Media: songs purchased from MSN Music, Napster, Yahoo Music, MusicMatch, AOL Music, Urge—or, of course, iTunes—can’t be played on a Zune. Instead, the Zune incorporates its own digital rights management technology: that technology enables Zune users to share complete commercial music tracks with other Zune players (they expire after three days or three plays) and may one day enable peer-to-peer transactions using Microsoft Points…but for now it means that if you want your protected music collection on a Zune, you need to either repurchase the music, re-rip your CDs, or come up with a solution which circumvents the DRM system your music uses.

Like it or not, consumer’s initial response to the Zune is largely defined by the iPod, which has been on the market over five years. Some buyers will purchase a Zune simply because it’s not from Apple, while others will see it as Microsoft’s me-too attempt to enter a market Apple defined. Initial consumer reaction to the Zune players is guardedly positive; many like the screen size, interface, and general feel of the player, but many are unsure of the utility of the unit’s wireless capability and put off by the substantial legalese and hoops in the Zune software.

Despite the Microsoft name, industry analysts don’t generally expect the Zune to be more than a footnote to Apple’s iPod juggernaut in the near to mid-term. However, Microsoft has been clear that it intends to stay in the personal media market for the long haul, refining its products and enhancing its services—and, unlike many who would compete with Apple, Microsoft has the resources, money, and know-how to compete as long as it likes. But one thing is for certain: Apple is not going to sit still and kindly wait for Microsoft to catch up.