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If you want to challenge the number one in
any market, you need to have a good, rather
an excellent product. But, most importantly,
you need to believe in what you are bringing
to the table. If not, you're doomed.
In the mid-2000s, Microsoft was riding high
on the successful Xbox and established itself
as the leading software for PCs. So, to them,
it seemed natural to take on and dominate
another market: mp3 players. But they were
up against the iPod.
To win, they needed to have all the parts
of the equation right from the start. They
didn't: what followed was an embarrassing
attempt at being cool, with odd mistakes and
even more unusual colors. We'll tell you all
about that other mp3 player, the Zune, in
this episode of Company Forensics.
Ever since iTunes was born, Microsoft tried
to copy it. In 2004, it created MSN Music
to compete, but the idea was short-lived.
Two years later, Microsoft shut it down and
launched the Zune service.
But Zune wasn't only a music marketplace,
because Microsoft brought a device into the
equation: the Zune mp3 player. There was lots
of hype: Microsoft had collaborated with Toshiba
and its Gigabeat products. It offered a new
marketplace, and the Zune had specs such as
30Gb of storage and audio, video, and photo.
When we say there was lots of hype,
that's what Microsoft hoped.
First, there was one big elephant in the room:
it was brown. Poop-brown. Let me give you
a moment to think about all the devices you
currently use that are poop brown.
That's right. Zero.
Still, Microsoft felt "brown was the new black."
That's not the title of a new, highly controversial
Netflix series. They truly believed that this
color would be hip. The rest of the world
thought otherwise.
At least, to a tiny population, the device's
uniqueness, including the color, seemed to
have worked. The Zune garnered a certain cult-following
from the start.
Cult-following, however, doesn't take a product
to the number one spot. And what happened
next, didn't help either.
Let's be clear. Reviews were adequate. The
device worked well, had extras like FM radio
and wi-fi capability, albeit limited. Overall,
users and testers alike considered Microsoft's
first try as a good one.
Well, no. Not everyone.
But behind the jokes, there's truth. It was
late 2006, early 2007, and Apple was working
on something more significant: the iPhone.
The iPod had already established itself as
the go-to mp3 player. Yes, people want to
support the underdog, but sometimes, they
also want to watch it fail.
Then there was the launch date. Microsoft
came out with pots and pans banging to launch
the Zune, one day AFTER Apple had announced
its fifth-generation iPods with storage capacities
ranging from 1 GB up to 80GB, and tons of
extras. Talk about bad timing.
Again, it became the target 
of jokes.
Like we said, overall, the Zune's performance
wasn't bad, and more options were available.
From the Zune 30 in 2006, the company expanded
the Zune array with models like the smaller
4, 8 and 16 GB versions, and eventually the
bigger 80 GB and 120 GB versions.
Reviewers felt the Zune was better than the
iPod in some respects, such as the user interface,
the ability to exchange songs,
and overall build
quality.
And when it launched, it reached number 2
in portable media device sales within its
first week.
By May of 2008, it had sold 2 million units.
All of this sounds great, right?
It does until you look at the numbers: during
that same time, Apple was selling about 3.5
million iPods per month. So yeah, Microsoft
sat in second place, but miles, miles away.
It's not all bad, however. Microsoft sold
2 million Zunes in less time that Apple sold
2 million of its first iPods. But back when
the iPod launched, the market was packed with
cd players and bulky cases.
Then, New Year's Eve 2008 happened: the day
when all Zune 30s went on strike. The device's
internal clock wasn't ready for leap years,
so on December 31st, 2008, the Zunes froze.
They stopped working.
Microsoft's answers seemed amateurish. The solutions included waiting until
January rolled along and letting the batteries
die out.
Talk about high selling points.
But, in 2009, came Microsoft's piece-de-resistance:
the Zune HD. With elegant design and outstanding
build quality, the HD seemed to check all
the boxes. For the time, its screen worked
wonderfully, and, through the Zune market,
you could rent movies and shows. They tried
to lure users with the subscription model,
which gave access to tons of media for a flat
fee, contrary to the iTunes pay-per-song model.
But we'll talk about this later.
Some critics have looked back and said the
Zune was far better than the iPod.
But all reviews spoke of one factor in common,
a trait so overwhelmingly obvious, buyers
couldn't walk past it.
The Zune was good. But not enough. It came
with a small vial of dissatisfaction; buyers
knew that there was something out there that
already did most, if not all, and better.
Products like the Zune need to do two things:
they either fill a gap in the market, or they
are so radical, they dominate.
The Zune did neither.
In all fairness to the device, since its birth,
the Zune faced adversity. The first generation
battled the fifth generation of iPods, which
had accumulated years of learning, mistakes,
and improvements. Even their top product,
the Zune HD, came two years after Apple released
the iPod touch.
In tech, one year is too long. Two are an
eternity.
Yet experts have said that if Microsoft had
released the Zune before the iPod, it would've
been a hit. It might've been, we'll never
know. But it means very little now when we
look back at its blundered history.
Remember the Zune market? Well, it wasn't
perfect. It proved to be deficient. In the
end, the subscription system proved to be
expensive and confusing. Users felt frustrated
with the credit system in which they bought
Zune Points, then exchanged them for media,
unaware of how much each song or movie cost.
Then there's Microsoft itself. From the start,
the company didn't seem to believe in the
product.
In an interview with Business Insider, Robbie
Bach, the former Zune leader at Microsoft,
candidly recalled that Microsoft's attitude
was wrong from the start. The Zune convinced
no one that it was the go-to device, and it
launched at a time in which smartphones were
taking over.
Bach highlights another critical aspect: the
lack of adequate marketing around the Zune.
There was no spice to justify the brown color,
and ad campaigns didn't target the right audience
if there ever was one. Plus, the ads themselves,
according to Bach, confused potential buyers.
But Bach doesn't keep all the blame on himself.
He criticized the music industry and how it
had grown dependent on Apple. They were "hooked"
on the Apple drug. But, I wonder if he would've
said the same if things were the other way
around.
Even giants like Microsoft can come up with
the wrong answer and offer too little, too
late.
Zune's death was anything but a surprise.
But if you think the Zune is a thing of a
distant past, well it isn't. The last Zune
rolled out in 2011, and its DNA persisted
in another device.
And that device is the Windows Phone. The
Zune's interface was so user-friendly that
Microsoft decided to use it as a base for
their phone's OS and other projects.
Those projects were the Microsoft Surface
tablet and a particular operating system called
Windows 8.
But, the cycle repeated itself. Zune's offspring
were just as bad. Just as flawed. Like a family
tree of talented individuals born just a bit
too late, Microsoft's attempts at breaking
new grounds always come up short.
We all know what happened to the Windows Phone.
Well, no. Most of us don't, because, like
most Microsoft products aimed at battling
with Apple, people weren't interested. It
just disappeared.
The Microsoft Surface is the same story. It
was battling the iPad, of all things, a couple
of years too late. It was a lost battle from
the start. Then, there's Windows 8. While,
as an operating system, we can't say anything
bad about it, we can't say anything good,
either. It survived under the radar, relegated
to office spaces and home users who didn't
have a choice but to use it. In this case,
that's a good thing.
As for the device itself, some Zunes still
survive, believe it or not. You can buy them
on Amazon and join the select few aficionados
who still use them. Some have even tattooed
their love for the device, but we recommend
against it.
In the end, the Zune was good. It just came
at a time when being good wasn't enough. But
it did leave us a couple of lessons: if you want
to change the consumer world, you better have
an excellent idea and believe in it. Also,
be sure it can tell time and, just don't paint
it like poop. See you next week.
