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By Daniel Terdiman
Posted on ZDNet News: Jul 21, 2006 9:05:00 PM

update After trying for years to compete with the iPod through an array of partners, Microsoft confirmed Friday that it plans to directly go after Apple Computer with its own rival, Zune.

Confirming weeks of rumors, Microsoft said it will launch music software and players under the Zune brand, though the software maker left plenty unsaid in its confirmation.

"Today we confirmed a new music and entertainment project called Zune," Chris Stephenson, a general manager of marketing for the software maker, said in a statement. "Under the Zune brand, we will deliver a family of hardware and software products, the first of which will be available this year."

The initial device will have Wi-Fi and use a hard drive to store music, Microsoft said. Stephenson's statement also lent some credence to speculation that the company's player will use wireless connectivity to share music with other Zune devices.

"We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together," Stephenson said. A Microsoft representative declined to offer further details, although Stephenson told Billboard magazine that other Zune devices, including a video player, are in the works.

The software maker has posted a teaser Web site, set to the song "Us" by Regina Spektor. Microsoft also noted its move on a blog, Zune Insider, whose author is part of the company's effort.

"So what's Zune?" writes Cesar Menendez, the author of the blog, who says he recently began working on the project. "It's Microsoft's new, holistic approach to music and entertainment. And yes, this year, we'll be releasing a device as part of the project. Under the Zune brand, we're looking to build a community for connecting with folks, all to discover new music and entertainment.

Microsoft is still apparently figuring out just how the wireless sharing will work. In the Billboard interview, Stephenson said the company is looking at several different options, including downloading music directly to a device, as well as sampling music from nearby devices.

Zune-branded devices are apparently only one part of Microsoft's strategy, though, with Stephenson telling the magazine that Microsoft's broader vision is to allow people to play and discover music from a variety of devices including computers, phones and the Xbox 360.

An Apple representative declined to comment on Microsoft's announcement.

This is not Microsoft's first attempt to go after iTunes and the iPod. Until now, though, the company has largely relied on partners to make the players and software that use its Windows Media digital rights technology and tie into the Windows Media Player software built into its Windows operating system.

More recently, the company had tried to modify that strategy. While remaining open to other players and services, the company had been focused on promoting more heavily certain products, such as iRiver's Clix player and the Urge service it helped develop with MTV Networks.

One of the big question marks surrounding Zune is whether any Microsoft music service will work with all of the third-party players out there, such as the Clix and devices from Samsung, Creative and others. Also unclear is whether rival music services, such as Urge, RealNetworks' Rhapsody and Napster, will work with Microsoft's upcoming player.

An MTV Networks representative said the company couldn't say what if any role MTV and Urge would play with Zune.

"We're talking with Microsoft on a number of levels and we can't comment on those discussions at this time," the representative said. The representative said MTV is committed to "nurture and evolve" Urge, which it says has received a positive response since launching in test form two months ago. Urge is built into Windows Media Player 11, with the software available as a download for Windows XP, and it will be an integrated part of Windows Vista when it ships next year.

Dana Harris, a spokeswoman for Napster, said the company isn't worried about competing with Microsoft. "We've held our position as the No. 2 service through the launch of MSN and Urge and a host of others," she said. As far as any device goes, Harris said Napster would welcome a cool product that works with its service, but declined to comment on whether the Zune player would, in fact, work with Napster.

A RealNetworks representative declined to comment.

On the device side, iRiver America CEO Jonathan Sasse expressed hope that the Zune could help raise awareness of non-iPod devices such as the Clix.

"Microsoft is a great partner and we expect continued success moving forward," he said in a statement. "The potential launch of a device by Microsoft does not appear to threaten our relationship in any way."

As a result of its heritage, analysts say Microsoft faces a potential backlash now that it has decided to go it alone.

"This is the first step, and it comes with a sacrifice," said Shaw Wu, an analyst at American Technology Research. "They now must compete with their customers."

Wu also pointed out that Microsoft must do more than just add its brand name to have a winner.

"I think it's yet to be proven that they can come up with a seamless, integrated experience that iTunes and iPod provides today," he said. "They have to create something as fun and easy to use. Everybody else has failed. You have to remember that people have an emotional attachment to their iPods."

Apple has maintained a dominant share of both the music player and downloadable music businesses, selling more than 58 million iPods and more than a billion songs.

CNET News.com's Greg Sandoval and Tom Krazit contributed to this report.

update After trying for years to compete with the iPod through an array of partners, Microsoft confirmed Friday that it plans to directly go after Apple Computer with its own rival, Zune.

Confirming weeks of rumors, Microsoft said it will launch music software and players under the Zune brand, though the software maker left plenty unsaid in its confirmation.

"Today we confirmed a new music and entertainment project called Zune," Chris Stephenson, a general manager of marketing for the software maker, said in a statement. "Under the Zune brand, we will deliver a family of hardware and software products, the first of which will be available this year."

The initial device will have Wi-Fi and use a hard drive to store music, Microsoft said. Stephenson's statement also lent some credence to speculation that the company's player will use wireless connectivity to share music with other Zune devices.

"We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together," Stephenson said. A Microsoft representative declined to offer further details, although Stephenson told Billboard magazine that other Zune devices, including a video player, are in the works.

The software maker has posted a teaser Web site, set to the song "Us" by Regina Spektor. Microsoft also noted its move on a blog, Zune Insider, whose author is part of the company's effort.

"So what's Zune?" writes Cesar Menendez, the author of the blog, who says he recently began working on the project. "It's Microsoft's new, holistic approach to music and entertainment. And yes, this year, we'll be releasing a device as part of the project. Under the Zune brand, we're looking to build a community for connecting with folks, all to discover new music and entertainment.

Microsoft is still apparently figuring out just how the wireless sharing will work. In the Billboard interview, Stephenson said the company is looking at several different options, including downloading music directly to a device, as well as sampling music from nearby devices.

Zune-branded devices are apparently only one part of Microsoft's strategy, though, with Stephenson telling the magazine that Microsoft's broader vision is to allow people to play and discover music from a variety of devices including computers, phones and the Xbox 360.

An Apple representative declined to comment on Microsoft's announcement.

This is not Microsoft's first attempt to go after iTunes and the iPod. Until now, though, the company has largely relied on partners to make the players and software that use its Windows Media digital rights technology and tie into the Windows Media Player software built into its Windows operating system.

More recently, the company had tried to modify that strategy. While remaining open to other players and services, the company had been focused on promoting more heavily certain products, such as iRiver's Clix player and the Urge service it helped develop with MTV Networks.

One of the big question marks surrounding Zune is whether any Microsoft music service will work with all of the third-party players out there, such as the Clix and devices from Samsung, Creative and others. Also unclear is whether rival music services, such as Urge, RealNetworks' Rhapsody and Napster, will work with Microsoft's upcoming player.

An MTV Networks representative said the company couldn't say what if any role MTV and Urge would play with Zune.

"We're talking with Microsoft on a number of levels and we can't comment on those discussions at this time," the representative said. The representative said MTV is committed to "nurture and evolve" Urge, which it says has received a positive response since launching in test form two months ago. Urge is built into Windows Media Player 11, with the software available as a download for Windows XP, and it will be an integrated part of Windows Vista when it ships next year.

Dana Harris, a spokeswoman for Napster, said the company isn't worried about competing with Microsoft. "We've held our position as the No. 2 service through the launch of MSN and Urge and a host of others," she said. As far as any device goes, Harris said Napster would welcome a cool product that works with its service, but declined to comment on whether the Zune player would, in fact, work with Napster.

A RealNetworks representative declined to comment.

On the device side, iRiver America CEO Jonathan Sasse expressed hope that the Zune could help raise awareness of non-iPod devices such as the Clix.

"Microsoft is a great partner and we expect continued success moving forward," he said in a statement. "The potential launch of a device by Microsoft does not appear to threaten our relationship in any way."

As a result of its heritage, analysts say Microsoft faces a potential backlash now that it has decided to go it alone.

"This is the first step, and it comes with a sacrifice," said Shaw Wu, an analyst at American Technology Research. "They now must compete with their customers."

Wu also pointed out that Microsoft must do more than just add its brand name to have a winner.

"I think it's yet to be proven that they can come up with a seamless, integrated experience that iTunes and iPod provides today," he said. "They have to create something as fun and easy to use. Everybody else has failed. You have to remember that people have an emotional attachment to their iPods."

Apple has maintained a dominant share of both the music player and downloadable music businesses, selling more than 58 million iPods and more than a billion songs.

CNET News.com's Greg Sandoval and Tom Krazit contributed to this report.

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  • Most Recent of 106 Talkback(s)
further Proof all M$ powermongers have little d--k syndrome...
How utterly pathetic that the company that revolutionized the PC has to copy any idea that makes money or even sounds promising. They're doin it well, so we've gotta throw 200 geeks, err..contract "e... (Read the rest)
Posted by: thebriang Posted on: 07/25/06 You are currently: a Guest | | Terms of Use
Competition is good in all its forms  NonZealot | 07/21/06
Yes, I suppose it is good...  nomorems | 07/21/06
Yeah, they're starting to sound like  John Zern | 07/21/06
Not really  tic swayback | 07/21/06
Hmm  NonZealot | 07/21/06
Doesn't matter  tic swayback | 07/22/06
Good discussion  NonZealot | 07/22/06
Differentiation is key  tic swayback | 07/22/06
How does a physical product compete with vapourware?  Richard Flude | 07/21/06
I forgot that some posters aren't that smart  NonZealot | 07/21/06
Right  Richard Flude | 07/22/06
You ain't no tic, that's for sure!!  NonZealot | 07/22/06
NonZealot - you know he is right, fool happy - NT  raycote | 07/24/06
Vapour-hardware?  Spikey_Mike | 07/24/06
Agree, can't say the same for their 'Partners'  dave95. | 07/21/06
Don't worry...  hal9000mx | 07/23/06
Business as usual  baggins_z | 07/21/06
Don't forget this part  tic swayback | 07/21/06
No worse then anyone else  mdemuth | 07/21/06
Partners versus leeches  tic swayback | 07/22/06
Why does MS ALWAYS HAS TO COPY from other firms? And  michael_t | 07/21/06
Hmm, MS copies Apple, Apple copies Creative...  Scrat | 07/21/06
Apple copies ? That's a laugh!  nomorems | 07/21/06
Oh please, get real...  Scrat | 07/21/06
Oh please..get detailed.  nomorems | 07/21/06
Well ....  fredsmith6 | 07/21/06
Yeah they bought the OS alright.........  dave95. | 07/21/06
I answered it, you just chose not to listen  Scrat | 07/22/06
3 guffaws!  slingzenarrowzuvowtrayjissforchin | 07/24/06
How about Xerox  John Zern | 07/21/06
Licensed it, not copied it.  nomorems | 07/21/06
Sorry, John, Apple paid for it in full.  999ad@... | 07/21/06
Wrong on history  dave95. | 07/21/06
Not actually wrong  999ad@... | 07/22/06
Zune is a decent name  PB_z | 07/21/06
Good point.  John Zern | 07/21/06
Zune is a decent name...  TCO . | 07/24/06
Got my order in...  Mike Cox | 07/21/06
It sure would be cool ...  P. Douglas | 07/21/06
The WiFi part strikes me  999ad@... | 07/21/06
Virus magnet? Could be  NonZealot | 07/21/06
huh??  galileon | 07/22/06
Well if ALL the units had WiFi  999ad@... | 07/22/06
More likely a DRM magnet  tic swayback | 07/22/06
Uh huh, just like Apple.  No_Ax_to_Grind | 07/22/06
Huh?  tic swayback | 07/22/06
Not so unprotected as you think  flatliner | 07/23/06
Premium prices  tic swayback | 07/23/06
Funny  TWRX | 07/22/06
more like "compete against" versus 'rival'  Boot_Agnostic | 07/22/06
Apple's already tried its hand at game consoles...  PB_z | 07/22/06
The funny thing about Apple is . . .  999ad@... | 07/23/06
So True  dave95. | 07/23/06
Oh most certainly  999ad@... | 07/24/06
They are in a spot to pick and choose as they please  Boot_Agnostic | 07/24/06
Good luck!  dave95. | 07/22/06
RICHARD FLUDE!!! HE SAID COMPETITION!!  NonZealot | 07/22/06
Uh Oh, someone woke the sleeping giant.  No_Ax_to_Grind | 07/22/06
Ooooh, I'm scared  tic swayback | 07/22/06
Not A Good Wager  tekspek1 | 07/22/06
Big difference  tic swayback | 07/23/06
Keep Waiting  itanalyst | 07/23/06
Don't think they were sleeping  dave95. | 07/22/06
Partners?  flatliner | 07/23/06
I'll remember that  nucrash | 07/24/06
Simplicity  TWRX | 07/22/06
good luck  not of this world | 07/22/06
Ipod, Microsoft Players = Both SUCK  itanalyst | 07/23/06
Huh?  dave95. | 07/23/06
You say what?  999ad@... | 07/23/06
Someone send this video to MS....  dave95. | 07/23/06
MSFT has one thing going for it  flatliner | 07/23/06
Knowing MS.....  hal9000mx | 07/23/06
Sorry Bitty, This Is Gonna TANK  itanalyst | 07/23/06
Just like Sony  Boot_Agnostic | 07/24/06
Doomed to failure  tic swayback | 07/24/06
Zune NOT compatible with Plays For Sure!!!!!  tic swayback | 07/24/06
iTunes locks you into it's music format, talk about limiting!  tgschmidt | 07/24/06
What happens when...  tic swayback | 07/24/06
Slanted view & just wrong....  GSavage777 | 07/24/06
But you had to buy every song  tgschmidt | 07/24/06
Who Invented What  BillyBrack | 07/24/06
Facts instead of hear-say  the_seb | 07/25/06
Google send searches for microsoft zune to Apple.com  dublinmark | 07/24/06
The real losers, Creative and Napster  GoPower | 07/24/06
Name almost as bad as "Wii"  Narg | 07/24/06
Not going to stop paying  tgschmidt | 07/24/06
To each his own  tic swayback | 07/24/06
Renting is good sometimes  tgschmidt | 07/24/06
Too many issues for me  tic swayback | 07/24/06
More confusion for the (naive) customers  dave95. | 07/24/06
Wrongo! No confusion for customers if this works.  Narg | 07/24/06
Wrong on what?  dave95. | 07/24/06
Congratulations!!  NonZealot | 07/24/06
What did I win???  dave95. | 07/24/06
You will be the proud owner of a brand new...  NonZealot | 07/24/06
Bugger!  999ad@... | 07/24/06
Sorry, it doesn't work that way  tic swayback | 07/24/06
You are guessing  NonZealot | 07/24/06
Another interpretation  NonZealot | 07/24/06
We are ALL guessing at this moment  999ad@... | 07/24/06
I know what I'll be saying  NonZealot | 07/24/06
Actual reportage  tic swayback | 07/25/06
I would be scared if I was Steve Job  Omer Qureshi | 07/25/06
Intelligent debate on zdnet?  the_seb | 07/25/06
further Proof all M$ powermongers have little d--k syndrome...  thebriang | 07/25/06

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