What would it take for Microsoft to Kill the iPod?

There are a lot of rumors this week about Microsoft?s anticipated iPod Killer. This is a product built by Microsoft that utilizes WiFi as the syncing link and is tied to a new iTunes-like service that could be easily accessed anyplace the iPod Killer could connect to a WiFi hot spot. This would allow the device to store music and video?much like the iPod does?and to stream it, which is something the iPod can?t do. It would also allow you to actually buy music right from the device?much like you can with the cell phone ?and not require a PC as part of the process.

At least, that is the rumor, but we don?t have specifics beyond that. So, could this device take out the iPod? If it could, it would create an interesting event where, on the Operating System front, Apple may have beat Microsoft to market with Leopard, while on the MP3 front, Microsoft has hit Apple equally hard.

Let?s take a look at what the components of an iPod Killer would have to be in order to truly ?kill? the iPod and whether Microsoft has the right stuff to even be a contender.

Design

Who can beat Apple on design? They seem to really get what kind of design people want to buy and have, hit after hit. Microsoft can?t compete, right? Well, maybe they can.

From the standpoint of appearance, the first Bluetooth keyboard and mouse Microsoft did were stunning; they were horrible to use (Bluetooth still has ?issues? when it comes to controllers) but they were arguably the best-looking in the market for their time. The Xbox 360 is another great design; in fact, many (including me) thought it was close to Apple standards (Apples and oranges, though, so all you can say is ?close?) but it was a huge improvement over the old Xbox. Finally, take a look at the latest, now Microsoft- designed Abacus smart watches. Unlike the clunky Fossil earlier attempts, these are stunning watches, and at under $200 they aren?t badly priced.

Just because you can do something doesn?t mean you will do something, but these examples showcase the fact that Microsoft actually does have competitive design skills.

Ease of Use

Apple really shines with Ease of Use. Their stuff just seems to work. Granted, they have had a number of quality issues of late, but Ease of Use is a good deal of what allowed them to take the MP3 player market decisively from Creative Labs and S3 (RIO ? although RIO was having litigation issues, which helped).

Is Microsoft a competitor in this area? This is a tough question to answer, because if you look at the Media Center, Origami, and Tablet PC you see incomplete offerings that fall well short of what their market (which is often more tolerant of complexity then the MP3 market is) was looking for in their segments.

However, here again the Xbox and MSN Direct watches are the better guide (because they come from more closely aligned groups) and these two offerings are actually world-class in their segments with regard to Ease of Use. In addition, the MTV Urge product is, in many ways, superior to iTunes in terms of value and Ease of Use, further supporting the argument that they can beat Apple here.

As before, just because a company can do something doesn?t mean they will, but these products show that Microsoft has the potential.

Marketing

If the product is a weapon, then marketing is the delivery mechanism and Apple is currently the segment leader in both marketing investment and marketing execution. This is the third leg of Apple?s competitive advantage and it is arguably their strongest. Granted, right now, they have shifted to PCs from the iPods, but their execution is still better than anyone else?s, and while HP is closing on the PC side, no one is even really challenging Apple on the iPod side.

Origami had a nice, low-budget launch execution, but sustaining marketing was almost nonexistent and the product really wasn?t up to the hype anyway. The Xbox, however, had a very strong launch (once again, close to Apple?s class), but sustaining marketing has not been up to Apple levels.

In short, this is probably where Apple is the most secure. By contrast, Microsoft?going back as far as Windows 95?has never really understood how to do sustaining marketing well (an exception may have been the original Xbox, which actually had a good sustaining program surrounding it, but those folks have probably moved to other jobs).

Conclusion

Microsoft could build a product that would be an iPod Killer, but right now they aren?t demonstrating the marketing competence that would be required to allow the device to rise to its full potential. However, HP didn?t have good marketing until they changed out some critical staff, and IBM went through the same process in the early 90s and turned around nearly overnight, which suggests a path for Microsoft to follow that could make them successful. We don?t have any evidence yet, though, that they are following it.

So, the net result is that while Microsoft could build an iPod Killer, they currently lack the marketing capability to kill the iPod with it.

Editors' Recommendations