Microsoft : Expect More Zune Players & Services In 2009

Microsoft's Zune director of marketing, Adam Sohn, has candidly revealed that the software company had "expected" sales of the under-fire media player to fall by a whopping 54 percent in the last quarter, that's $100 million; sales have reached a mere $85 million.

Ever-optimist Sohn said that the Zune did fine, adding it was right about their expectations and that they felt "pretty good" about the direction that's going, even without Microsoft's marketing muscle.

He hinted in the interview to Seattle PI that the company could deliver the next generation of Zune software and hardware soon adding that they will deliver progress during this calendar year.

Sohn also blamed a number of factors for the Zune's "average" performance, citing the category (media player), the business and the economy (ed: and the weather and Jobs health).

Still there are some questions remaining: What prevented Microsoft from selling the Zune outside the US? Why not develop a proper, iTunes-basher, subscription based music service?

Many have called for Microsoft to Axe the Zune and concentrate instead on getting Windows Mobile up and running. The truth is that iPod sales have almost certainly plateaued (at least as far as revenues are concerned) and Apple will try to encourage iPod users to move to the iPhone instead.

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Our Comments

iPod revenues have fallen 16 percent in the last quarter while unit sales have increased by 3 percent, underlining the fact that people are buying cheaper versions - iPod Shuffle or iPod Nano - rather than the iPod touch. Apple iPod sales still reached $3.3 billion, 40x times what Microsoft achieved. Microsoft is currently losing the mobile platform war, it needs to take bold decisions now before it is too late.

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