Zune Thoughts: The Fool Still Doubts The Zune

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Wednesday, May 7, 2008

The Fool Still Doubts The Zune

Posted by David Tucker in "Zune News" @ 03:00 AM

http://www.fool.com/investing/value...ng-so-zune.aspx

“Walk away from the Zune, Microsoft. There are only two scenarios in which I can see this as a battle worth fighting: one, if this is the platform that will be used to take on your video-game console rivals in the portable handheld market; or two, if it will bring something new to the wireless communications space. If the Zune is going to evolve into the next DS or PSP, blessed with a ton more storage capacity, great. If this is going to be a cell phone, in a brazen attempt to take on the iPhone, at least you have a strong enough mobile-operating-system pedigree to have a shot.”

I’m sure that Rick Munarriz over at The Motley Fool generally knows what he’s talking about (and with a middle name like “Aristotle” I would hope so!) but I’m going to have to respectfully disagree with him here. For one thing, he compares Zune sales to Sansa sales in his article. That’s like comparing Vaio sales to an eMachine. Not really the same class of device. Sandisk crashed the market with low end players when it came in. Microsoft is taking a long term approach with quality.

His other argument was that Apple’s iPod sales stalled; therefore, Microsoft missed the boat because the market isn’t growing. I have to wonder how exactly that analysis works out. If Apple sold 10 million players in Q1 and 10 million players in Q2, it sounds to me like the market grew by about 10 million people. Unless he really thinks those were all the same people! I’d say this is still a booming market. There are a lot of people who don’t own MP3 players still and this market will continue to grow and evolve. Microsoft doesn’t need to go anywhere and I don’t think they plan to.

Tags: zune, , fool

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