In an interview with the San Francisco Chronicle, Robbie Bach, president of Microsoft’s Entertainment and Devices Division, says the company has managed to sell “a little over a million Zunes,”—and claims the company’s device has a 10 percent share of the hard-disk based media player category.
In comparison, Apple’s iPod—which has admittedly been on the market much longer than the Zune—recently celebrated its 100 millionth sale, and reported sales of over 10.5 million iPods during its most recent fiscal quarter.
While the Zune has its fans, the player also has its share of detractors, who point to initial problems with the Zune software, compatibility with Windows Vista, and limitations on Wi-Fi usage and music sharing which make the Zune’s arguably most-innovative feature—the ability to share music wirelessly with other Zune owners—something of a non-starter. Microsoft has maintained that it’s in the personal media player space for the long haul, and will continue to develop and evolve the Zune product line: it expect an incremental victory in the market, not an overnight success. In the interview, Bach admits the Zune had yet to obtain the critical mass which would make its music sharing concept take off: “When your installed base is a million, the benefits of sharing, frankly, aren’t as wide as we hope to see in the future. One of the challenges for us is continuing to build on the install base.”
In addition to highlighting new pink and watermelon-colored Zunes, Bach also notes that the “attach rate” of songs from the Zune Marketplace to Zune players is “pretty typical,” and that, like iPods, most music on Zune players is ripped from CDs. The Zune ignited controversy just before it became available when Microsoft struck a deal with Universal Music which granted the music company a cash royalty on every Zune sold, presumably to stave off perceived losses from declining CD sales.