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Mon, 26 Jan 2009 Microsoft hit by Zune sales crash

Microsoft Zune sales plummeted during crucial holidays period as platform revenue decreased $100 million

Nick Spence

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Zune, Microsoft’s portable media player, seen by some as a rival to Apple’s iPod saw sales plummet by $100 million, or 54 per cent in the company’s most recent quarterly results, announced last week, which included the all important holidays period.

Apple, in the same period, saw its iPod sales up 3 per cent bucking the recent trend of recession hit sales, with the company selling a record number of iPods during the Christmas period.

In an interview on Friday afternoon, Zune marketing director Adam Sohn said a number of factors were to blame for the decline in sales.

"It's the category, it's the business, it's the economy," Sohn said, adding a note of optimism.

"We met our internal plan for (the) holiday," Sohn said, noting that a year ago Microsoft was boosted by strong sales of a heavily discounted, older 30GB hard drive-based Zune.

Some observers have suggested that Microsoft should dump the Zune brand, blaming the company’s lack of cool for poor sales.

“Let's face it: Microsoft is not cool. That's reality. It's an enterprise software company and, however much one may dress up enterprise software, it's still not sexy or cool,” wrote Matt Asay, an open-source business specialist and CNET Blog Network team regular.

“In the Zune, Microsoft is playing to Apple's strengths. In products like SharePoint and SQL Server, it plays to its own. Microsoft needs to find a way to get into the consumer market without drowning in Apple's wake. The Zune is not it,” Asay added.

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Comments received


Ynda said on Mon, 26 Jan 2009

"We met our internal plan for (the) holiday," - that must have been some Sales Plan!
- Hi, boss, we are going to crash the sales of the Zune!
- Yep, seems like a great idea. Go for it!

Jaded said on Mon, 26 Jan 2009

""It's the category, it's the business, it's the economy," Sohn said, adding a note of optimism."

The category eh? The category that saw its market leader gain 3%? Microsoft better hope that they don't believe their own spin!

Kevin said on Mon, 26 Jan 2009

Yet another dumb-arsed M$ idea. Just dump the stupid Zune (zune, zoom, boom to bust) rubbish and do what you do best.... Hmm, come to think of it, what do you do best...

Gabriel said on Mon, 26 Jan 2009

As long as Ballmer remains as head of Microsoft, his insecurity, envy, jealousy and fear will keep the company in denial on its failing products (Zune, search, etc.).

That won't change until he's either gone, or things become so desperate that nobody at Microsoft can deny it anymore.

MacWorld Reader said on Tue, 27 Jan 2009

Microsoft hit by Zune sales crash - good.

Phil said on Tue, 27 Jan 2009

Nothing to do with the fact that it looks something used to break the enigma code. Still, think of all the landfill. mmm
Well done MS another winner.

Andy Rawlins said on Sat, 31 Jan 2009

Sorry fanboys but its actually quite good. And the software is great. Much better than the hateful iTunes. When I need to replace my iPod I'll certainly consider one (if they ever release it in the UK of course).

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