Consider that Microsoft has billions and billions of dollars in the bank, ready to fight to the death to gain ascendancy in the digital music player arena. As a practical matter, you have to expect that Apple ought to fear that sort of clout. Also consider how Microsoft has been able to dominate the operating system, office suite and browser arenas and you can surely bet it’s a force to be reckoned with.

At the same time, Microsoft hasn’t done so well when it strays beyond its core business. Yes, the Xbox has been fairly successful when it comes to sales, but at what cost? Every single unit is sold at a loss, with the hope that enough Microsoft games will be sold to make up the difference. Or perhaps they’ll come to dominate the market someday and be able to raise prices yet still retain market share.

Of course, if I had some Microsoft stock, I’d be seriously considered about this kind of business plan. I’m in it for the money, and that’s not a way to make money. On the other hand, I’m not a stockholder in Microsoft or any other company.

Now it’s clear that Zune has earned a lot of attention simply because of where it comes from, and because Microsoft has embraced much of Apple’s strategy in creating an ecosystem around the new music player. Giving its PlaysForSure partners the brush off, the Zune won’t even support that software or hardware scheme. Songs you acquire from Napster, the former MSN Music and other PlaysForSure-complaint services won’t work. Period. If you bought music from those services, you have to buy them all over again. Not even a converter?

What about the poor companies that invested millions of dollars with the expectation that their partnership would pay off? In theory, PlaysForSure is still in operation. In practice, they have a right to be seriously concerned, and they will think twice about ever partnering with Microsoft on any other misbegotten ventures.

As to the Zune player itself, it has gotten so-so reviews from nearly every major technical resource, except for CNET, which seems to adore the player for some unaccountable reason. Sales of the black version appear to be decent at Amazon, where it has been in the top 10 for the past day. The other colors have fared much worse, and sales at retail channels are also reported to be tepid.

Unlike Apple’s new products, few are lining up to acquire a Zune. Except for a few so-called “fanboy” sites devoted to the product, not many are paying serious attention. If it doesn’t take off right away, I rather suspect the media will look elsewhere for stories.

This isn’t to say Zune must be a failure. The first product indeed seems rushed, of course, probably because Microsoft had to have something ready for the holidays. But if they lick their wounds and go back to the drawing boards, they certainly have the talent to build something that would truly compete with the iPod in looks and perhaps even in the interface department. But how many people will cut them enough slack to allow them to perfect Zune? Besides, can they really turn on a dime like Apple and gain an advantage beyond a couple of questionable extra features that seem to have been added by committee?

But maybe Microsoft is just getting far more attention than it truly deserves. If any other company came out with the Zune player and the Zune Marketplace, it would get a couple of stories and that would be it. With Microsoft, even after all the failures to extend its reach beyond its businesses, they’re still large enough to capture attention.

So, yes, you have to take Microsoft seriously. Surely Apple does, and if Zune were to gain any traction at all, you’d quickly see changes in the iPod line to regain its advantages. For now, let me confess that I have not seen a Zune player in person. I have not examined Microsoft’s Zune Marketplace site either. To be perfectly selfish about it, if they carried my Podcasts on the site, I’d pay attention. Otherwise, I have better things to do.

This article was posted on Wednesday, November 15th, 2006 at 3:45 AM and is filed under News and tagged with: Billions And Billions, Core Business, Digital Music Player, Ecosystem, Microsoft Stock, Napster, Partnering With Microsoft, Playsforsure, Stockholder, Time Microsoft, Zune Player.