Microsoft used to be dangerous and when it simply refused to give up on a new market. It would eventually come up with something clever and bold, which would give it a massive market share of any new technology market.
It even had a reputation for getting things right on the third attempt and then winning the market, but the real truth of the matter was that Microsoft eventually bundled whatever it was trying to get to work, into the operating system and gave it away ‘ and suddenly it would take a global market lead. Now that this has been more or less outlawed by successive anti-trust suits, it instead throws money at new markets. That strategy so far is not as good.
Just how much it has thrown at the Zune is hard to say but it will be considerable, though we don’t think it has yet reached $billions. Now Microsoft is giving it one more go and this time it has realized that its fledgling loss-makers in and around the entertainment business ‘ Mediaroom, Xbox and Zune are better when marketed together. IN effect it may not be able to bundle things into the operating system of a PC quite so often, but there’s nothing to stop it bundling or linking or tying one entertainment service to another, because it’s not dominant in any of them.
So while usually outraged at any form of monopoly bundling and how it gives immediate marketplace control to a company which is inappropriate, in this instance linking the Zune marketplace with the Xbox Live service is just common sense. It’s such a good idea that the new Zune device is perhaps a sideshow to this move.
The first question to answer is why did Microsoft not do this before and we think that’s obvious. The people at Xbox didn’t want to be saddled with customers for the Zune video service, who would get upset if the Zune never made it to a next generation ‘ and vice versa. What this new move actually means is that the Zune marketplace has to continue to exist for some time to come, even if Microsoft gets tired of bashing its head up against the iPod range and gets out of the device market, it has to keep the Zune marketplace, just for the 17 million Xbox fans. And why not make it available to the 3 million Mediaroom IPTV customers as well?
This idea of merging all web services from one company into one, is the trend anyway ‘ Nokia has combined everything it does ‘ music, videos, games into the Ovi Store, and so all of the Microsoft stores have to be combined. Perhaps it is only a matter of time before Apple’s App store and iTunes are combined.
But there is one word in the Microsoft statement that perhaps excites us more and that’s the world ‘international,’ because this tie up between the two entertainment divisions of Microsoft is said to be international, so for the first time that we can remember, the same tracks and videos for Zune will be available outside of the US and Canada, and not only on a Zune, but also on the Xbox.
This means that the Zune marketplace will become international, which means that content rights have been negotiated around the world (Microsoft used to have two separate sources of content contracts, one for inside the US and one for most other countries). And that suggests the Zune will gain a wider international audience as well, and will really be a rival to the iPods and Walkmans of this world.
The device itself is what most people have focused on ‘ is it desirable enough in its own right? ‘ and it is certainly the most desirable Zune so far.
It has an OLED touch screen, with a touch interface which lets you rapidly flip through music, and shows video in the 16:9 widescreen format display offering a resolution of 480 x 272.
OLED offers better contrasts and uses less power than LCD screens and is generally thought to be the technology of the future ‘ though it is still expensive and should be thought of as a series of millions of tiny CRTs.
Zune will also offer HD radio which is Okay for US consumption, but will have to be replaced if this is to be sold more widely. HD Radio is a local US standard used nowhere else it the world, designed to allow an analog audio signal and a high quality digital one to co-reside on the same piece of spectrum. The rest of the world mostly uses DAB, a European digital audio standard which has been taken up across most of Europe, Asia and is likely to dominate Latin America. Swapping out the HD Radio for a DAB radio is no big deal, but Microsoft as yet has expressed no interest in exporting the media player outside of the US, only its content.
Instead we suspect that the Zune DRM may be upgraded from its strange hybrid for the Zune (which was not Windows Media DRM nor PlayForSure) as Microsoft slowly standardizes on PlayReady across all of its services. In this way it can offer services through Xbox, but also onto any phone that has PlayReady installed ‘ a system which Nokia is backing and which it claimed in 2007 it was helping Microsoft to write. There are reports of Zune content on Xbox being readied for Germany, Spain, France, Italy and Ireland this year. In this way Microsoft doesn’t have to try to internationalize its devices ‘ just its content platform.
Getting back to the device, gaming should be next on this device’s agenda, and although there are only a handful of casual games on the Zune so far, this Xbox link may go deeper. Certainly the Zune Marketplace will be keen to see touch based casual gaming added and where better to look than at all the publishers of the Apple App Store games, which also rely on touch.
So far the next generation Zune is being announced purely conceptually and there are no specific models yet out, and that may come at next week’s Electronic Entertainment Expo (E3). If Microsoft chooses to borrow from its Xbox gaming partners it may even offer a few pleasant surprises here in the way of original and graphical games. Other specifications of the device not yet clarified are the various storage options ‘ whether they are hard drives (unlikely) or Flash (almost certainly) and how much of it each model has.
The device will be able to store and play HD video up to 720p and also will offer an HDMI output to a TV set, to make HD video portable, as long as you buy an additional docking station, and the device will come with full-screen Internet browsing driven by a multi-touch interface which will work well with the bundled Wi-Fi.