The new Microsoft Zune player will be launched in Australia in the New Year the Managing Director of Microsoft Australia, Steve Vamos has confirmed. This will be followed by a range of Belkin accessories for the Zune player.
Zune accessory manufacturers like Belkin are tipping big sales off the back of the Zune player which will go head to head with the iPod in Australia.
Belkin’s new Zune accessories include the TuneBase FM transmitter, TunePower, Acrylic case, holster case, neoprene sports armband case, sports jacket case and clear screen overlays to protect the LCD.
The two coolest Belkin accessories for the Zune player are the TuneStation FM transmitter, which will sell for around $125.00 and the TunePower, which will sell for around sells for $89.00. The FM transmitter secures the Zune in either portrait or landscape mode and allows transmitted on FM frequencies from 88.1 MHz to 107.9 MHz. The TunePower is a portable battery that can increase the run time of the Zune by up to six hours and includes an AC adapter.
With its Zune digital music player, Microsoft is showing just how powerful its marketing clout is. On Dec. 6, the company disclosed that it’s on track to sell more than 1 million Zunes by June 30, the end of its fiscal year. While it’s no iPod, which will likely sell 15 million of its full family of devices in the holiday quarter, Zune is establishing critical mass. “It’s totally in line with our expectations,” says Bryan Lee, vice-president of entertainment business at Microsoft.
The projection comes in the wake of sales data from market research firm NPD that shows Zune sliding from second to fifth place among digital music players in the week ended Nov. 25, its second week in stores. But Microsoft says that data includes cheaper players with less storage capacity, not the market it’s targeting with Zune.
“The De Facto Challenger”
Lee says Zune isn’t positioned to go for the high-volume segment of the digital player market that the flash memory-based players are shooting for. Instead, Microsoft is focusing on the higher end of the business for hard disk-based players.
Zune is the latest effort by Microsoft to find new growth. The company is gambling that it will build an iPod-like business over several years and hopes to eventually cut into the market leader’s hegemony with such features as the ability for Zunesters to share music wirelessly with each other.
Despite the NPD numbers, analysts say Microsoft’s Zune forecast meets their expectations. No one believes Zune will displace the iPod anytime soon, if ever. But Susan Kevorkian, an IDC analyst, says Zune will eat into the market share of the leading iPod rivals, such as Creative, SanDisk, and iRiver. “It’s in the process of becoming the de facto challenger,” Kevorkian says. That will happen thanks in large part to the market muscle that Microsoft has but rivals lack.
Making the Numbers
As for chipping away at the iPod, that’s not even on the radar, even in Redmond. “We wanted to get out and be relevant in the space,” Microsoft’s Lee says. That grounding will give the company the foundation on which to build its Zune business. “We’re pretty fast learners,” Lee says.
If Microsoft hits its sales forecast, it would translate into $250 million in sales. That would put Zune sales in its first seven months alone on par with what Goldman Sachs analyst Rick Sherlund estimates will come from annual sales of Microsoft’s mobile phone software.
What’s more, the forecast puts Microsoft on track to hit the high-end of analyst expectations for Zune sales through the 2007 holiday season. Some analysts say Microsoft could sell as many as 3 million Zunes through the 2007 holiday season.”It doesn’t seem that anyone would look at our numbers and say they can’t make those numbers,” Lee says. That would be sweet music indeed for Microsoft.