Microsoft released the Zune back in 2006, in an attempt to take on the iPod, which had a stranglehold on the music-player industry. It simply never caught on. Bloomberg cites research by the NPD Group saying that last year the iPod had 77 percent of the market, compared to less than five percent for the Zune.
I can admit it in public: I'm a Zune owner. And the NPD research must explain why I've never come across another Zune owner anywhere. Trying to use the social feature of a Zune turned out to be a very lonely, anti-social experience.
There are some almost eerie similarities to the history of the Zune and the briefer history of Windows Phone 7. Start off with the basics: In both instances Microsoft was very late to market, and was attempting to unseat an extremely popular market leader. With the Zune, Microsoft tried taking on the iPod. With Windows Phone 7, it may even have more trouble, because it's trying to take on two market leaders: the iPhone and Android phones.
In both instances, Microsoft has said that it would spend untold amounts of money to make sure the hardware succeeded. Bloomberg notes that Robbie Bach, who was then president of Microsoft's entertainment and devices business, said that Microsoft was going to invest hundreds of millions in Zune to make sure it was a success. And Bloomberg quotes Steve Ballmer at the time as saying about the iPod:
"We can beat them, but it's not going to be easy."Ballmer has been saying much the same thing about Windows Phone 7. And as for how much Microsoft will be willing to spend on Windows Phone 7, here's what CNNMoney.com quotes him saying about that at the Professional Developers' Conference back in October:
"Make no mistake about it, we're all in. I get all kinds of questions about 'what if you don't do this or that,' or blah, blah, blah. BOOM, baby, that's what we're going to do!"Say what you will about Ballmer, but the man has a way with words, doesn't he?
Both the Zune and Windows Phone 7 had less than stellar starts after their introduction --- neither rollouts could be considered breakthroughs. And in both cases the hardware, although solidly done, wasn't innovative enough to be clearly superior to existing products.
Of course, there's also a very big difference as well: Microsoft has a partnership with cellphone giant Nokia that is phasing in over two years. That, in itself, could ensure a long life for Windows Phone 7. Still, even though Microsoft has very deep pockets, it won't spend billions of dollars forever on product that has no payback.
It's clearly several years too early to say that Windows Phone 7 will go the way of the Zune. But the history of the Zune is certainly a cautionary tale for Microsoft.