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Microsoft to dump old Zune models

by on03 September 2009


New Zune HD model will fly solo

Microsoft will be launching the new Zune HD on September 15th, and the new device will become its standard product.  It will feature HD radio, HD video-out, a touch screen and an Internet browser. This is the good news; the bad news is that going forward this will be the only Zune device that Microsoft will continue to manufacture.

Microsoft has announced that it plans to discontinue all of its other Zune models after the new HD version is out.  It did say, however, that it will continue to offer the flash-based Zune 4GB, 8GB and 16GB devices, as well as the 80GB and 120GB hard-drive devices, until they are sold out.

Microsoft also indicated that it plans to launch an updated Zune software and service at the time the Zune HD becomes available, as well as a Zune video service that will be available on Xbox Live later this year.

Introduced almost three years ago, the Zune has not been very competitive against the iPod family of products. The Zune division at Microsoft was reorganized some time ago and combined under Microsoft’s TV, video and music business.  Matt Rosoff, an analyst with Directions on Microsoft, indicated that the decision for a solo HD Zune will provide Microsoft a way to cut its losses from the lower end of the market and to maximize on its up and coming next-gen Windows Mobile Smartphones.

According to Rosoff, the Zune HD has some features that are quite attractive and that surpass those offered by the iPod Touch, including the option to purchase a monthly subscription to listen to an unlimited supply of music from the Zune Marketplace via a Wi-Fi connection. However, Microsoft was so delayed in marketing a fully featured device that consumers didn’t pay much attention to it. "They launched weak," Rosoff said. "By the time they got it right nobody cared."

Rosoff also indicated that Microsoft wants "…to be in this business primarily as a way to keep the brand alive, keep the service going and maybe pave the way for the next generation of the Windows phone, which I assume will have similar form factors and have the Zune software integrated into them."

The Zune HD launch on September 15th will have its work cut out for it.  Chris Stephenson, Microsoft's General Manager of Marketing for Zune, recently resigned and plans to leave Microsoft on September 4th in advance of the Zune HD's launch. In addition, Apple has announced that it will hold a press event on September 9th, where more iTunes and iPod product announcements are expected.

Last modified on 03 September 2009
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