Zune Thoughts: Zune's Not Dead (So Stop Asking!)

"The demise of the Zune as a device is premature. In an interview with the P-I, Entertainment and Devices President Robbie Bach acknowledged that "We have already started to see some flattening and even declining in the stand-alone MP3 player market. I think you'll see that continue." But he also said he did not think the device would go away, at least in the short term. "I just think it's not going to be where most of the growth is," he said. "We have some great assets in the software we do for the Zune -- both on the PC and on the Zune device -- as well as the services we provide -- Zune Social, Zune Marketplace. We see opportunities for those beyond what we do on the device itself."

It's amazing how easily a two-sentence sound bite can be taken out of context. Steve Balmer and Robbie Bach's comments last week about the future of Zune have lead many tech bloggers to declare that the Zune project is on its last legs. Sure, Zunes haven't been selling as well as they probably should have by this point, but there are several fairly easy ways to get into the black—most of which Microsoft should've done since the beginning. Things like releasing internationally, putting the platform on more hardware, and a deeper integration with other Microsoft services would be a great start, and to what I think Balmer was referring. Others, like C|Net's Matt Assay think Microsoft should get out of the media player business altogether:

"Microsoft should not be in the Zune business. Period. No amount of Apple envy should have taken Microsoft into the Zune, and its best option is a quick exit. 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. Billions of dollars in profit, however, is cool, and Microsoft has that in spades. Sure, it risks losing out on the digital-entertainment revolution by not having a music delivery platform, but there are other ways to get into that business without trying to beat Apple at its own game."

Chris at GotZune rightfully tears into this argument, but I couldn't let this level of stupidity go by unchecked. It would be foolhardy of Microsoft to go into the next decade without a strong content distribution and entertainment platform. And, as the developer of the world's most popular operating system, is in the best position to bring connected entertainment to the masses. Far from being irrelevant, I believe Zune actually fits perfectly in with the "three-screen" strategy Balmer unveiled at CES. As entertainment that perfectly spans all three media (PC, mobile, TV), games, music, and video have the opportunity to be constantly connected and deeply integrated with Microsoft's other Internet- and cloud-based services. Marketplace (with Zune Pass) on the Zune device is already a great example of this. Extending Zune service to Xbox and Windows Mobile platforms will fill in key experiences for consumers and ensure Microsoft's relevance for years to come.