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Like a lot of movie and music content, Australia will not see the new Microsoft “Zune” Player until at least next year and maybe not at all if Microsoft cannot deliver a content site for the Australian market.

 The iPod has up to 80% share of the Australian market and critical to this share is the ability of Apple iPod owners to download content from the iTunes web site.

The problem for many Australians is the physical lack of content with many content providers not interested in servicing Australia. Australians visiting US content web sites will find themselves locked out because they don’t own a US credit card.

 Last week Microsoft unveiled a package of portable music players and an online music download service named Zune. Their primary objective is to take portable music and video market share away from Apple. Many analysts don’t believe that they will be able to do this and instead they will take share away from previous partners like Creative Technology, SanDisk and Samsung.
Microsoft took the wrapper off the Zune player, which some have nicknamed the iPod killer,'' last week. It is scheduled to hit stores US around the Christmas season. <BR>According to David Mclean head of gaming and entertainment at Microsoft there are no plans to launch the Zune player pre Xmas.&nbsp; <BR>Microsoft boasts that Zune has what iPod doesn't have _ music-sharing capability. Using its Wi-Fi wireless function, Zune users will be able to detect one another and then share songs, recordings and pictures wirelessly. Songs copied from another's Zune will be available for playback up to three times only, and afterwards users will be guided to purchase them via the Zune online marketplace. <BR>For Microsoft, the target is clearly Apple. It is investinghundreds of millions of dollars” over the next few years to overthrow the years-long dominancy of the iPod player and iTunes music store, according to Robbie Bach, president of the company’s entertainment and devices division.
Samsung also has tried to expand its share in the portable music player market, while avoiding a head-to-head clash with Apple’s iPod.
Earlier this month in Germany, Samsung unveiled two new music players _ YP-K5 and YP-T9 _ with the opening of a music subscription service in Europe. But the company’s spokesperson said on Friday that it will not operate the online store in the United States, or Australia.
According to GFK in Australia Apple has up to 89% of the large player market and 82% of the Nano size market.  According to market researcher NPD Group, Apple held 75.6 percent of the digital music player market in the United States in the second quarter of the year. Samsung was only the fourth-largest seller, with a mere 2.5 percent share after SanDisk and Creative.
The YP-K5 player which Samsung says will be launched in Australia has a touch-sensitive control pad and a slide-out speaker, which makes it look like a cute mini boom box.

 

Microsoft didn’t totally unsheathe the player but instead handed out bits of information about the device, which is a departure for the company, With the exception of its Xbox game consoles, it traditionally has stuck to making software for computers and devices, and has let hardware manufacturers make their own gadgets. But that strategy hasn’t worked for music players. Microsoft produced a “Plays For Sure” operating system for non-Apple machines, but consumers largely ignored the devices.

The company’s answer: Mimic Steve Jobs and create its own device, supported by its own software. The biggest differentiator between the two company’s players is the Zune’s built-in wireless capability, which will allow users to swap music back and forth with each other.

Other than that, the Zune hews closely to the design specs iPod users are familiar with: The initial model will offer 30 gigabytes of storage, and has a 3-inch screen that will display both photos and videos, and is designed to sync up with a Microsoft-owned music store. Zune will also come with a built-in FM radio tuner, a feature that is often standard on other devices that compete with the iPod but which Apple sells as an accessory.

Significant details left unsaid: how much the device will cost, and how much Microsoft will charge users to buy individual tracks or to “rent” music via a monthly subscription fee. Right now and using US pricing as a benchmark, digital music buyers generally pay 99 cents for individual music tracks and $10 to $15 a month for subscription services; this week Apple dropped the price on its 30-gig music player to $250. Music pricing “will be in line with what people are used to,” hinted Scott Erickson, senior director of product management for Zune. “We won’t be undercut by Apple.”

 

Erickson also wouldn’t say whether Microsoft had signed deals with the four major music labels to sell their music compatible with the device. One of them, EMI Group, has agreed to preload the Zune with a smattering of tracks. Industry observers expect the remaining large music companies–Warner Music Group, Vivendi’s Universal Music Group and Sony BMG, a joint venture between Sony and Bertelsmann AG–to eventually sign on with Microsoft, but not before haggling with the company about how its wireless sharing feature will work.

Those negotiations could ultimately affect just how effective Zune’s key selling point is. Consumers will be able to load their Zunes with any music they already own, provided it is in one of the formats that the player supports (music purchased via Apple’s iTunes stores won’t work), and share them with other Zune owners, who can play each song up to three times, or hold on to it for three days. But music purchased via Microsoft’s store may have other restrictions, depending on negotiations with individual labels and other rights holders.

It’s also unclear how Microsoft’s move will affect other hardware manufacturers and music services that had worked with the company on its earlier “Plays For Sure” operating system. Yahoo! , Napster and RealNetworks have designed their music stores and subscription services to work with the platform, while device makers including Toshiba, Samsung and Creative have all built players designed to sync with the system.

Source: Forbes News Service

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