My Digital Life

Apple TV’s Lackluster Sales may be the Crack in the iPod Armor Zune HD Needs

With the official announcement of Zune HD, Microsoft may have the opportunity to crack the iPod's armor. Not that I think the Zune HD will be so wonderful, but because Microsoft currently owns the digital living room's eco system. Microsoft's foray and success into the gaming world, with the Xbox, gave them an opportunity to capitalize with a device designed to be connected to the internet and the TV. To Microsoft's credit they are capitalizing on this functionality with the ability to purchase music and videos, stream from NetFlix's online library (1 million Xbox subscribers), and access one's own media center content. Xbox 360 has accidentally turned into the living room media device Microsoft has been talking about forever and according to Silicon Alley Insider is "kicking Apple's butt".

What made the iPod, what it is today was not that it was revolutionary device (there were plenty of MP3 devices around), but the integration with iTunes. Although the iTunes application is not that great (still no multi user functionality), it made the process of purchasing and synchronizing your music with the iPod child's play. That simplicity was a key factor in popularizing the iPod. The same can be said about the X360 marketplace, it simplified the process of purchasing and renting HD content. In addition to its primary mission as a world class gaming console, the integration with Media Center allows the Xbox 360 to be the bridge between content stored on a PC and the TV. The Zune HD will be able to take advantage of this functionality to seamlessly integrate into the Xbox 360 eco system.

If you currently own an Xbox 360 and an iPod, the Zune HD maybe the next device in line, especially when you can convert the DRM free iTunes Plus content. I think the two remaining items Microsoft needs to do to insure the Zune HD's a viable Touch competitor is Xbox gaming as well as Windows Mobile application support. And, of course phone integration.

The new Zunes

"In an event at the building that houses Microsoft's Zune team, Chairman Bill Gates said the company is committed to the music-player category and reminded attendees that it took Microsoft time to become a serious competitor in many other areas, including word processing, spreadsheets and graphical user interfaces. "We think the same kind of things in terms of persistence and innovation can apply in this connected entertainment area," said Mr. Gates."  (per the Wall Street Journal)

Microsoft Corporate Vice President, J Allard, and Chairman, Bill Gates, unveil the newest Zune media players in Redmond yesterday.

With sales of 1.2 million Zune, Microsoft holds about 10% of the 30GB MP3 player market. This translates into a 3% market share of the MP3 player market vs Apple's 72%.

Microsoft new lineup include an 80GB hard disk based device, as well as 4 and 8GB flash based devices priced identically to the comparable Apple iPod models. The two innovations in the new Zunes are the ability to perform wireless synchronization over WiFi and a touch control which will respond to finger flicks. Apparently, Microsoft has engineered this version of the Zune from the ground up, rather than rely on Toshiba's original Zune design. They have also revamped the Zune marketplace software and is better integrated with Media Center to enable the synchronization of recorded video content. In contrast to Apple's strategy of not providing previous generation iPods with current generation firmware, Microsoft will provide new Zune software features for the 1st generation Zunes.

Although not revolutionary, it shows that Microsoft is serious about staying in the game. However this looks to be a long game... 

The week of April 16th in My Digital Life

The iPod, went on sale in November 2001, five years later Apple Inc. has sold its 100 millionth copy. Sony sold 100 million Walkman devices in about 14 years. Apple holds about 74% of the US retail market for MP3 players. SanDisk is a distant number 2 with approximately a 9% market share, while Microsoft has about a 2.3% market share. These are impressive statistics for Apple Inc. which do not show any sign of abating anytime soon and they have set their sights on surpassing Sony's 350 million + current Walkman sales figure.

Apple does not break down its iPod sales, but from what I understand the Nano is their biggest seller by far, then the shuffle, and third are the hard disk based iPods. Microsoft's  2.3 % market share with Zune is a misnomer since it is a hard disk based player and should be compared to hard disk based iPod market share. It would be very interesting to know what that number is. Still it probably is not a number Apple has to worry about. On the iTunes Store front, Apple Inc.has sold over 2.5 billion songs, 50 million television shows and 1.3 million movies.

Dell last week announced the demise of the Axim line of Windows Mobile PDAs with a post on their blog. The Axim X51v I own has been the best performing WM PDA I have ever owned and it is too bad Dell has chosen to get out of this space. I also found the following statement puzzling: "Why did we make the decision? Because of a steadily declining market for pen-based PDAs and noted over the past several quarters by analyst firms like IDC and Gartner.".  This makes no sense to me since Apple is betting on the iPhone's success to be the touch screen. If Dell would have mentioned that they did not want to get into phones, I would have better understood given that HP has not been very successful in this area, but to say that pen based or touch screen demand is waning was a little strange. I have also heard this comment from Microsoft and how the Windows Mobile Smartphone (no touch screen) sales have surpassed touch screen based Windows Mobile phones. Personally I want the best of both worlds, a great one handed experience from a WM Smartphone and the extra control a touch screen gives me. Since Apple Inc. is betting the touch screen experience, it will be interesting to see how well their claimed innovations with multi-touch perform.

Last week mymobile911 provided news of the successor to the T-Mobile MDA which is no longer being sold by T-Mobile USA. The news and an updated release date of May 21 seems plausible. Unfortunately the device is not very impressive. It does not have 3G and the specs are about the same as the MDA. For myself the only advantage would be  Windows Mobile 6.0 and a 2MP camera. My MDA is also getting well worn, so I may jump on especially if the $249 price is accurate. It is also very interesting how T-Mobile is really lying low on the 3G roll out. They must be having some issues.

This week:

• Thanks to Ilium Software, I will be upgrading my eWallet 4.1 to 5.0 and my NewsBreak from 1.2 to 2.0. I will be reviewing my experience with these upgrades.
• I will be finishing up my blog entries on the Verizon Aircard 595 on pocketnow.com.
• I will discuss my migration to my new Lenovo Thinkpad X60 with Windows Vista.
• My review of the BlueAnt Wireless T8 Micro Bluetooth headset should be published this week on pocketnow.com.

"Waiting on Apple Cellphone Call"

"Waiting on Apple Cellphone Call", this the title of an article in today's Wall Street Journal. The stock analysts believe that this is Apple's next big move, unfortunately they no longer can use iPhone as a product name, Cisco has just released an Internet phone product line using that moniker. Is this Apple's first misstep? Not really; they fumbled their first launch of a phone with Motorola and Cingular. What was the name of that product? The ROKR was short lived because of its crippling restrictions (Microsoft lawyers take note), however that fumble came at Motorola's and Cingular's expense. It really did not affect Apple's iPod/iTunes franchise. The second fumble is Cisco's release of a product line under the iPhone moniker, this maybe a bigger issue for Apple marketing to deal with, Apple's hyper secretive product philosophy may be working against them, the press and the buzz has adopted the term iPhone for an iTunes capable cellular phone. This is what consumers is now expecting and once a name is ingrained in the consumer's psyche, it affects how you market a product and how it is perceived.

The moral of the story for Apple is that the longer it waits to deliver this product, the more time there is for error. It gives Microsoft time to enhance the Zune platform and with the Windows Mobile phone experience Microsoft has gained over the years, the Zune phone could be the product that provides a fissure in the iPod franchise. On the other hand if Apple rush a product to market that is not ready they could do more damage to the franchise. It is hard being the leader, especially when Microsoft is in the shadows.This is good competition...

The week of November 27th in My Digital Life

Every time I drive down I-95, cellular data connection seems to get better and better. Other than the analog modem speed associated with Edge and GPRS, the connection was very reliable. Some day we will have 3G speeds which will be great, but the current technology is definitely usable. It is interesting to note that the FCC has authorized carriers to start pulling the plug on their analog cell networks starting in January 2008 and the unintended consequence is the disabling of older in car emergency response systems like On Star which rely on the analog cell system.

Sony had another bad week with the recall of some of their Cyber Shot cameras, on top of the massive laptop battery recall and delays with Play Station 3, this has not been a good year for them. The models affected are the DSC-F88, DSC-M1, DSC-T1, DSC-T11, DSC-T3, DSC-T33, DSC-U40 and DSC-U50. More information can be found here. I am glad it does not affect my DSC-W70.

It looks like Apple is about to lock up the Beatles' music catalog from a CNN Money story here. As part of the article a Fortune article on Zune is also mentioned. I was surprised not find any Zune advertising in the Thanksgiving/Black Friday news paper advertising sections, however on Sunday Sears had Zune front and center in their circular. They were associating Zune with the Xbox 360 which I think is an excellent move. Narrowing the market segment should help Zune sales.

Still no sign of Business Contact Manager for Outlook 2007. I am not sure what the hangup is.

Items I am working on this week:

• I will discuss Acronis' True Image 10 Home backup software on my Media Center.
• I will discuss Diskeeper 2007 I installed on my Lenovo X41 Tablet.
• I am starting a review of Soyo' s FreeStyler HS11 Bluetooth headphones.

Hopefully my review Mobility Electronics (Think Outside) Sierra Bluetooth keyboard will be published on pocketnow.com this week...

At the end of my first week with Zune

Here I am traveling south bound on I-95 using my laptop tethered to my T-Mobile MDA via Bluetooth using the EDGE network. It works fine running around 50Kbps (dslreports mobile speed test) while traveling at 65MPH. I can't wait for HSPDA fromT-Mobile. Unfortunately I am listening to my iPod since there currently is no good way to integrate Zune with my BMW sound system other than using the auxiliary input, however this method does not provide steering wheel control or text display. The other method of using an FM transmitter provides sub standard audio quality, especially in urban areas where FM stations are grouped close together, is not acceptable.

I think there has been a good amount of press about Zune in the past week and that is good. You need to get the name out there, OK the reviews were not glowing but I don't think they were terrible. The Zune team might not think so as Cesar Menandez wrote "Zune Reviews: Too Harsh?...", however I think most of the reviews I have read offered balanced criticism. Matthew Miller from ZDNet wrote "Is the press being too harsh on the Microsoft Zune?" and seems to blame part of the problem with the launch. I have to agree with him, although on the other hand I also I think Microsoft was afraid of a huge launch which would magnify any misstep and could have killed the whole brand. As a first release with the Apple iPod as your competitor you have to soft step into the market, develop your brand and later attempt to squash your competitors. Something Microsoft has shown it can do well. Another interesting article on CNET news is an interview with Bill Gates with some comments about Zune, connected entertainment, and wireless. He points to wireless as a major differentiator against the iPod. I agree, however there is a lot of work that needs to be done for it to be useful. He also points to integration with the car as a major use. I could not agree more, this is were I use my iPod the most.

After seven days my conclusions for individuals looking to purchase an iPod or a Zune are that if you are interested in the following features:

• Large screen to watch videos
• FM Radio
• Subscription service
• Integration with Xbox and Media Center

Then Zune is for you, otherwise I still think that the iPod is king for now. The question for me is; do I wait for the planned software updates or sell my Zune on eBay and wait for the next generation? According to Microsoft they do not plan any major updates before spring, seems like a long time.

The week of November 20th in My Digital Life

The Thanksgiving holiday week is upon us. This is the unofficial start to the holiday season and usually a slow business week except for Friday which is known as "Black Friday" the day most retailers sales turn profitable for the year.

Last week was a good week with Zune. The general consensus seems to be that Microsoft has earned an honorable mention on its long road to make a dent in Apple's domination. The bottom line is that the hardware is excellent, however the software and Digital Rights Management policies need revisions.

I downloaded the RTM of Vista on Friday from the MSDN subscriber web site, but have yet to install it, fearing total disruption with the set of applications I use regurlarly. I will probably install it as a Virtual PC image but more research is required.

Office 2007 is working well, however there is no sign of Business Contact Manager. The reference on the MSDN subscriber download site has even been deleted. I am still trying to find out its status.

Phatware released Calligrapher 8.4 last week and I could not get it to work on my T-Mobile MDA. It installed fine however Write Pad would not launch. I reverted to 8.3 and all is fine. No news from tech support yet.

Items I am working on this week:

• Some final thoughts about Zune before I return to my iPod.
• I just upgraded to Acronis' True Image 10 Home backup software on my Media Center and will publish my initial thoughts.
• I just upgraded to Diskeeper 2007 on my Lenovo X41 Tablet and will publish my initial thoughts.
• I will publish a list of the Windows Mobile software I currently use on my T-Mobile MDA.

I have two reviews waiting to be published on pocketnow.com; my reviews of the Mobility Electronics (Think Outside) Sierra Bluetooth keyboard and Gomadic's Double chargers.

Happy Thanksgiving...

Is Zune dead on arrival?

Is Zune another Microsoft Bob. This is the premise of an InfoWorld article found here. For those who are unaware of Bob, it was an attempt by Microsoft to revolutionize the user interface by using wacky characters and home metaphors. That effort went no where. Although I think the situation with Zune is quite different, this is an interesting article.

Zune was developed by the same group that developed the Xbox and we all know how that is turning out. The success of the original Xbox was due to heavy discounting and the killer game "Halo". Next came the Sony PS3 delivery fiasco and Microsoft's almost perfect release execution of the Xbox 360. It will take a Microsoft fumble before Sony can gain back its previous dominant market share. The general consensus is that Sony's PS3 will garner a 50% market share at best and Microsoft's Xbox 360 will garner 40% at a minimum. Not bad for version 2.

Can the same scenario be laid out for Zune. If the first release of Zune is able to gain a decent market share, let's say in the 10% range and Apple's stumbles releasing a future wireless/large screen iPod. The Xbox scenario might be repeatable. Unfortunately those are currently big ifs. To gain a 10% market share Zune needed a differentiator, WIFI, sharing and a larger screen could do it, however WIFI and sharing are looking to be fairly useless and the larger screen is nice but graphic rendering such as album art needs work. All of these can be fixed with a software update, hopefully Microsoft is already working on it. Clearly there is a long road ahead, who would have thought that Sony could have stumbled.

However there is one significant difference between the Sony and Apple wars. The iPod has created a huge ecosystem. Just this week Apple announced a deal with Air France, Continental, Delta Air Lines, Emirates, KLM and United Airlines to equip their aircraft with in seat iPod docking features which will allow the iPod to charge and play using the seats video and audio functionality. WOW!

I like Zune quite well, the problem is that there is not enough of a differentiator for me to give up the iPod's ecosystem. I mostly use the iPod outside the house and traveling. I would say that 70% of my use is in my car, I have integrated my iPod into my BMW's sound system. The sound quality is so good that I dumped my CD changer. Where is Microsoft on this front, FM transmitters just don't work very well. (BTW; here is a link to an excellent Wall Street Journal video on in car iPod installations). The next 20% of my use is while traveling. In addition to listening to music, I watch videos (although the iPod screen is really too small), and backup my digital camera's memory card. The last 10% of my use is outside doing yard work and riding my bike with a Bluetooth adapter and my Motorola HT820 Bluetooth headphones. The only differentiator for my usage pattern is Zune's larger screen to view videos, unfortunately I don't watch enough videos to justify keeping Zune.

I also use my Windows Mobile T-Mobile MDA, with the iTunes Agent add in, around the house in conjunction with my Bluetooth headphones, maybe Microsoft should incorporate Zune into Windows Mobile; that would give me a big reason to dump my iPod.

 

My Zune is Full

After synchronization completed, which took between 2 and 3 hours, my Zune is full with 5560 songs (my iTunes library - protected songs), 5628 pictures and 28 videos. I clearly have room to clean up. I don't need the majority of the pictures and videos.

Zune storage status under settings/about/storage.

Things I like so far:

• User interface. The user interface (UI) is based on the Windows XP Media Center UI and is actually better than the iPod UI (most reviewers think so and I agree). With Apple's historical claim that they have better UI designs (at least better looking), it is a coup for Microsoft to take the lead. Zune's UI is intuitive and pleasant to work with.
• Although some have reported instability with the Zune PC application, I have had no problems. Although the navigation is not as intuitive as it should be, connecting and disconnecting Zune is much easier and faster than with iTunes.
• The ability to have a custom background.
• Excellent screen size.
• The videos I created from my Tivo for the iPod work well.
• The photo show video I created in Adobe's Photoshop 5.0 works, although the stills are a little blurry. This hopefully is just an adjustment when I create the video.

Things that are missing or need work:

• No search capability. iPod has this on their latest iterations of the iPod.
• No clock. No one wears watches anymore, why would Microsoft have left out this feature.
• The WIFI sharing feature is getting lamer everyday. Now, Microsoft is admitting that the 3 play 3 day rule does not apply to all purchased music. It is up to the artist/publisher, so check the license before you buy. Come on...
• Blurry album art, this needs to be fixed.
• No digital camera adapter.

I will add to this list as I use Zune. This is a good first release and all the basics work well, but a lot more work is required to make Zune a real competitor.

Installing the Zune software

Here is a the link to screen shots of the installation.

Here is a video on the Zune launch from the Wall Street Journal and CNBC.

The installation process went smoothly. The first step in the installation was to search for a firmware upgrade, which it found and updated the device to 1.1 (already!). It then proceeded to search for all the media on my PC. You can tell it to search for pictures and videos in addition to music. I selected all media types. My iTunes library is stored under "all users" and I was pleasantly surprised that it found it. The installation read all of the .m4a (AAC) music files and integrated them into the Zune library. However it did not attempt to deal with the protected content from the iTunes store. Fortunately I only have a small percentage of music which is protected and I may go the route of ripping a CD and re-importing them. It also has a verify nice feature to monitor the directories with media content and will automatically update the Zune library. I can add music to my iTunes library and Zune will automatically add it to my Zune library. Very nice.

The next major step in the installation is the association of the device with the Zune Marketplace. Here, there is a little confusion on how the installation works. You must first log on (with your passport, live, xbox, or zune id) or create an account before you can select a Zune tag otherwise you get an error that the Zune tag is not available and you seem stuck in a loop. When signed on, if the Zune tag is not available the application will display Zune tags that are available. It is also confusing that you have a Zune name and Zune tag. They should really be the same. Once registered you are presented with the option to purchase content, points or a subscription from the Zune Marketplace. Points are used to purchase contents and you must purchase a minimum of 5 points for $5. The only rational I can think of for using points instead of currency is that Microsoft can award points easier than cash credits, but it is a pain to have to purchase in 5 point increments.

Now the device synchronization, I have decided to let run all night. I will verify the synchronization this morning. I doubt that all my music, pictures and videos can fit on 30GB, so it will be interesting to see what happened.

So far I really like the matte finish and screen size. Zune is a little chunky but does not feel clumsy in one's hand. Today it is time to play with Zune and see what it can do...