Survey Says: Zune Just Might Stand a Chance
Nov 3, 2006
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In the five short years since it's introduction, the Apple iPod has become a phenomenon, hailed for its design and function, garnering a huge following, and spawning it's own related industry in iPod accessories. While dozens of attempts have been made to topple the king of all portable digital audio players, no one has come close.

Now Microsoft, has set its sights on the market iPod built with its own Zune music player, which will begin shipping in a matter of weeks, after months of pre-launch marketing already struggling to create an iPod-like base of loyalty—or the perception of one.

Even a competitor as powerful as Microsoft has been seen as likely doomed to take second-place to the iPod, but a new survey conducted by ABI Research shows that that many prospective digital audio player buyers - even iPods owners - would be likely to choose Microsoft's Zune player.

ABI surveyed 1,725 teenage and adult U.S. residents, asking them whether they planned to buy an MP3 player in the next 12 months. Of those responding that they were likely to do so, 58% of those identifying themselves as existing iPod owners and 59% of those who owned other brands said they would be "somewhat likely" or "extremely likely" to choose a Microsoft Zune player over an iPod or another brand of MP3 player.

"Our conclusion," says principal analyst Steve Wilson, "is that iPod users don't display the same passionate loyalty to iPods that Macintosh users have historically shown for their Apple products." Only 15% of iPod owners said they were "not very likely" or "not at all likely" to choose Zune.

It Comes Down to Differentiation

The question remains whether Zune will be attractive enough to build a sales record that is anything like the iPods (39 million sold so far in 2006). ABI believes that a critical factor will be whether or not Microsoft can differentiate the Zune from competing products in a meaningful way.

One differentiator, Zune's Wi-Fi peer-to-peer sharing, which Microsoft is playing up heavily, "isn't all that compelling, at least not now," notes Wilson. "There's a lot more you could do with that capability."

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