1 Million Zune Sold for Next June? Would it be a success?

“Microsoft Corp. said it will sell more than 1 million Zune digital media players by June 30, giving its first forecast for the device and showing how it plans to stack up against Apple Computer Inc.'s iPod.”

“That tally should allow Microsoft to meet its goal of becoming the second-biggest maker of media players with a 30- gigabyte hard drive, Bryan Lee, a vice president in Microsoft's entertainment business, said in an interview today. Lee declined to say how many Zune players Microsoft has sold so far.”

That sounds like a fair number to me. It may not be a lot, but what will be important to watch is the growth rate the Zune will have. A nine month period is a good sample to accurately predict what would be the future of a product. What would be the unit sold number that would make the Press say that the Zune is a success or a failure? 1 million seems border line. Isn’t it?

Microsoft focus does not seems to be on the Marketplace. We didn't hear a thing about forecasts on the number of downloaded songs and the number of Zune-Pass subscribers. My understanding was that the core of the market was gaining market shares in the music and entertainment content. That may be for another interview!

Lee also mentioned in the interview that Microsoft wants to use the first Zune to gain “a foothold to expand'' into new countries, sell models with different sizes of hard drives and develop flash-based models. He also said the Zune phone was still in the plan.

The question is how fast Microsoft can build new models? If they started the Zune project only 10 months ago, they should be able to come out with a few new models in the next 12 months or so. A flash-based Zune model is mandatory and they need it fast since this is the faster growing segment in this market. And the 16Gb Flash players being just around the corner, the future of hard-disk based music players is uncertain. Bigger hard drives will be the easy part since we know that it is only a matter of manufacturing the Zune with a 60Gb, 80Gb or even 100Gb hard drive. With the highly expected iPhone and Touchcreen iPod, Microsoft needs to act fast to capitalize on the momentum created by the Zune hype.

source : bloomberg