Ummm...all products see a boost the week they are released.  The big tell comes when we get to see if they can sustain it.

There can be many opinions on this. I will add one more question.

Do you believe there are lot of people who would buy a product with so many negative reviews from the same medium they read these reviews, the internet ?

I believe Zune is currently in the category of products you have to see and use before you buy. Its the only way to find for yourself how valid the most anti-Microsoft (and not anti-Zune) reviews are.

Thestreet.com article you link also states:

"Still, the Zune was outsold by players that are compatible with Microsoft's PlaysForSure technology as a group, he said."

I wish you would add PlaysForSure support to Zune. If nothing else, it would give critics one less thing to complain about. :-)

Well, enjoy your so-called 9% share while you can.   The first number that actually matters is the market share after the entire 2006 holiday season is complete.    

As for the 30,000 retail locations, I was in one of them -- Office Depot -- yesterday.   Not exactly a store with a customer base I'd associate with the Zune marketing message.   The employees said not a single one had been sold, despite prime real estate for the Zune display near the front door.        

Cesar,

Can you please clarify the NPD numbers? Is the #2 position for the first week based on number of units Microsft shipped to retailers, or on actual numbers of units sold to consumers.

Much appreciated - Dan

To Joe T -

Well Office Depot and Staples never carried any music players prior to stocking the Zune. Music players don't traditionally have many business uses and thus haven't been traditionally sold there. So I would expect low sales for ANY music player in one of their stores.

Dan

"Do you believe there are lot of people who would buy a product with so many negative reviews from the same medium they read these reviews, the internet ?"

this may shock some on this site, but not everyone is so hardcore they read internet reviews or go to this blog.

Even if Office Depot doesn't sell many Zunes, it will still help with Microsoft's overall product awareness. And according to their stated long-term plans, this first wave of first-generation players (modified Toshiba Gigabeats) is primarily about awareness. Microsoft just wants consumers to know that there are alternatives to the iPod.

And Office Depot helps them do that, even if they don't sell.

The same strategy was part of Apple's reason for opening their own retail outlets. They wanted to increase awareness and control the consumer experience to put their products in a good light. If they had profitable sales, that would be a (very nice) bonus.

thanks Ryan for bringing that dose of perspective :) - Cesar

I've had my Zune for just over a week.  I really like it so far.  My girlfriend wants one but says it's too big for her.  Any plans to release a flash Zune?  

I only hope the impressive week does one thing...  I really hope this encourage the Zune team to be even more nimble and progressive going forward.  Personally, I'd like to see better product testing before releases.  My wife's brown zune and my black zune have started skipping once every 5 or 6 songs.  Also, the software is extremely buggy on one of my 3 home computers.  Trust me, a lot of the sales will come from word of mouth.  How can I honestly suggest a player that skips frequently and has a good chance of not even installing on someone's machine?  I don't mean to go off on a rant, but I keep hearing about an 07 firmware/software update.  Ummm...not a good idea.  J talked about showing that you guys are serious in this market.  Showing that you're serious means quickly responding to costomer complaints and improving the product that people spent their hard earned money on.  Obviously, Cesar doesn't code the updates himelf...I just wanted to get my point across.  

It's ironic that before I was complaining about a lack of features...now I just want my player to function correctly.  Sometimes I just want to slap myself for being an early adopter.  I go through this way too often.

I say that A LOT of more TV marketing NEEDS to take place so the brand can establish itself. Common, how exactly does someone plan to compete with the iPod where Apple has an ad run every 20 seconds (very annoying to me, but it gets the average consumer). See, all of the non-techies think like this: Hey, I saw that product on the TV on a cool commercial, that means it's really good. Really, that's how people think, well the less informed ones atleast. So, that means that Zune needs to advertise A LOT more (as a Zune fan, I'm very sad that I've only seen ONE commercial on TV, and it was by luck). But don't just have the logo and "Welcome to the Social", people are too lazy to go to their computers and go to Zune.net to find out more about whatever they saw; they need to see the Zune sharing in action, the FM tuner, the amazing colors, the UI, and all of the rest that Zune has that the competition lacks. (One great example of this is The Lion and the Gazelle). The brand needs to be marketed and so does the device. I really hope that I begin to see a lot more and especially during the time leading up to the holiday season, take advantage!

SU - I (we) hear you man. And the dev team is actually working hard to code some fixes for that. And I know you "keep hearing" this and that, but you've been reading this blog for a long time (thanks for that!) and you should totally know to take news about future Zune updates with a grain of salt - we haven't officially talked about any updates (yet). but know the team is working on it.

cesar

Congrats! I guess the Black-Friday sales paid off.

The main problem with the iFans is that they are so bored that they can only be trolls! Here's why:

1- Some people don't trust buying online since they can't see the product and they prefer to see what they are getting

2- We don't trust the news and politicians (ex Ir@q war / 9-11)

3- The negative reviews didn't "feel" right. Ask any Zune owner and they would say that the zune has faults, but not to the degree that the blogs have been stating.

People must remember that in the western world, we have been lied to WAY too many times (ex, racism, politics, science). Most people are educated enough to look for themselves rather than just believing what someone has said.

Dan H / BJ ,

Noone said there was *zero* benefit to the Zune being offered in Office Depot.  The point is that just quoting a large number of storefronts in which the unit is being sold doesn't guarantee anything.   My personal opinion is that when the final holiday numbers are tallied, the 1st generation Zune will have significantly less than 9% share.      

Why did MS go HD instead of flash this first time around?

Joe T, I agree with you. There was a bit of a buzz that Microsoft generated in the blog community that drove initial interest in the Zune. I would expect sales to drop off as the mainstream press reviews come in and the reality that this was a product rushed to market and missing many features of competitors becomes known.

Early on there was quite a bit of positive buzz on the Microsoft "supported" blogs. I predicted in a comment on this blog at the time that when the mainstream press got a chance to review the Zune that the "love-in" would stop. And it did.

Microsft claiming to be #2 based on only 1 weeks'worth of sales seems a bit absurd. Looks like another attempt to salvage some positive press out of what is by most accounts a less than stellar debut. We'll see if Microsoft is still #2 in the coming weeks.

Here's what The Channel Checkers has to say about sales at retail (read non-Amazon) outlets:

http://www.thechannelcheckers.com/category/electronics/mp3-players/

Dan

Dan & Joe..

Two lessons:

1) History tends to repeat itself

2) "Those who cannot remember the past are condemned to repeat it." George Santayana

I can't say for sure what Christmas 2006/2007/2010 will hold for the Zune, but I won't brush this off. MSFT has taken on

Netscape with IE

Word-perfect & Lotus 1-2-3 with Office

PS3 & Nintendo with XBOX 360

Apple with Windows/DOS/OS2

Sure they had their failures (ex BOB), but I won't pass being #2 for one week as a trivial thing. The 1st gen iPod was a disaster. However, making key design & software changes made the iPod #1. Now, unless you are convinced that ONLY APPL has any intelligence in this planet, you can expect that a key point in the Zune's lifetime could make (or break) the product.

As for me, I'm getting my zune and popcorn ready since this could be an interesting show to see in the coming years.

"We're happy to see this but we know this is going to be multi-year investment."

I'm very glad for the current numbers, too, but I am even happier that you re-enforced that statement.

WOOT!

Congrats! I posted about is on my blog as soon as i found out earlier today!

Dan- Number 2 meaning they are the MP3 player selling the most behind Apple. Sandisk used ot be Number 2, but Zune catched up.

-http://generationzune.net

Dan - I heard today that NPD reports on sales (not shipments) - wanted to get back to you on that.

- Cesar

Cesar - Thanks. It's hard sometimes to sort through numbers 'cause all of these groups that report numbers are not consistent. I work in the music biz and I know in our business a gold record is for 500,000 units shipped, not sold, and it has been rumored in the past that some record companies have shipped more than they knew they could sell so they could get the gold!

Dan

"thanks Ryan for bringing that dose of perspective :) - Cesar"

you're welcome. and I got a suggestion for you. it's a small thing, but is there any way you could do some kind of registration like major nelson does on his site? like I said, it's a small thing, but I like not having to enter information everytime I go to post and just be able to type away. i'm not sure what you could link to, as you don't have profiles of users to link to like the maj does on xbox.com, but something, anything, would be a step up.

Eventually I like to see Zune be given portable/wireless Media Extender capabilities.  But I have another suggestion:

Right now when you open up Zune software you see the word "marketplace".  It would be cool to have a list of Local Zones on home network.  If my wife, son and daughter have their own collections it would be great to access each others collective home media and that stored on our Media Center PC.  By access, I am not talking about copying content, only playback. So when I select a Zone other than MarketPlace I get a list of content in that device's repository.  And if the "Zune" device is a Media Center PC we should be able to access Live TV streams through Zune software.  This is connected entertainment.

While much hyped on the internet the general public probably had very little knowledge of the Zune before Black Friday sales hit. It was out only 2 weeks and I didn't see any mass-media ads. Early adopters would account for most of the sales and 9% unit share is not bad...caution fanboys "unit share" not market share.

As to mainstream press reviews, do a google search for Zune Fud it seems even DVD Jon found it ridiculous. A Motley Fool commentary was great.

Rio Karma owner...love DAPS-hate DRM.

Got my Zune and like it a lot.  However, after syncing the first time, I am unable to sync again.  I synced all my songs to the device and then disconnected.  I made a few changes to the songs in the Zune software (changed a couple ablum names and fixed some album art).  Now when I try to sync again so the changes are made to the Zune device, I am unable to sync.  It just hangs on "preparing to sync."  If I stop the sync and click "start sync" to try again, I get a window that says "Cancelling inspection of files on device" and then a green progress bar moves across.  Once that finishes, it goes back to sticking on "preparing to sync."  Anyone else experiencing this?

congrats to zune!

i have a strange feeling that this version of the zune is a beta release. microsoft just rushed it to market for this year's holiday season eventhough they are actually working on the real first generation models.  

I think softy wanted to send it out there to get some word of mouth and to get feedback (knowing it would mostly be negative)...then they incorporate the changes into the real gen 1 release....next November.  It'll address most of the criticism...and it'll have new features and intergration and form factors instead of relying on the toshiba player.

that's my hunch....this is the beta version of zune. any sales at this point is gravy.

I'm an independent musician who makes a good portion of income on iTunes....was playing with the zune marketplace today. I miss the imix (shared playlist) feature that's prominent in iTunes.

Also had the impulse to buy an album I saw, until I saw it priced at 880 points.  Instant confusion, lost the energy to make the purchase.  I don't see how an alternate currency like this will stand the test of time.  But even if I never buy from the Marketplace...Universal will still get paid.  This is a scary formula for the future of the music biz.  (especially indie artists)

I give up!  I want the Zune to work, I really like it a lot, but I can not get it to sync.  The software is by far the worst thing I have ever used.  I thout iTunes was bad, but Zune definetly takes the cake.  I want to keep this thing, but if it isn't going to work, then I am going to have to return it.  Very disappointing.  By the way, tech support knows nothing.

i went to best buy to pick up the zune but they were sold out (i did score the clerks II limited edition boxset tho!!) so i just went to gamestop and bought one. i think it is cool that i can go to the same place i buy my 360 games and get the zune.

I think this is premature at best. This tracks sales for the first 4 days. Remember, Zune was in the top 10 even on the Amazon list for the first week. It was driven by the early adopters and microsoft employees who knew about the product. Since then the product has continued to slip in rankings.

I agree with the observation that the ad dollars poured by MS will serve to expand the market.... these ad dollars will lift all boats including Apple and Sandisk.

My prediction for the holiday quarter: Apple (75-80%), SanDisk (8-10%), Creative (3-5%) and Microsoft (3-5%). Coming in at 4th is not bad.

Apple will sell ~20M units this quarter. 6M more than last year. That is 19 M more than the Zune. That will leave the marketshare stats at:

83 M (Apple): 1 M (Zune).

"I wish you would add PlaysForSure support to Zune. If nothing else, it would give critics one less thing to complain about. :-)"

What the critics say means nothing if in the long run it becomes a market success. The only value these guys have is in figuring out if the features meet your needs/wants.

And wouldn't this (Launch and early sales estimates) be heralded as a major success by Apple fans if it had been a new product from Apple going up against a market dominate microsoft product? Look at OS X which holds 5% of the market share and all the accomping hype about it gaining traction in the market.

It all perpective. I'm just really tired of hearing online media setting their own benchmark for success for a given product and then judging accordingly. Serously, how many near perfect score reviews have you see of ipods which don't allow you to sync with competing emusic stores, have no built in radio function, have drm attached to online music purchases, have released highly imperfect updates to its online store(their version 7 no less! lol), had product fail abnormally(my boss had hers brick within days of purchasing a nano), has online store that as slow as a snail on the pc side....need I go on? Yet how many reviews have you seen of the zune where it gets rated down for some of the same problems?

Its got to be a very rare product that comes out in a market place with many competing products and immediately dominates the field.

Negative reviews?  I take all reviews with a grain of salt.  I actually think the reviews I've seen have been good "from my perspective".  

PROS

Reviews on the device itself have seen to be VERY good.  Great UI, feels good, etc.   Even TWiT which has slammed and ridiculed Zune has been quick to point out that the device itself is great.

CONS

Once again I'll say it, "DRM is evil".  All of the reviews have slammed MSFT on this one.  Abandoning your own PFS user base was a huge blunder including not even allowing WMP to integrate with the product.  

CONCLUSION

With that all said, I don't like DRM and I avoid it at all costs.  I am a YMU to go subscriber so I have a lot of DRM'd files but they're "rented".  If I want to keep a copy I get the CD (half.com current option of choice - anyone have any better AND LEGAL options?)

That said, all the stuff that they've been SLAMMING the Zune on is irrelevant to my use of the product.  And the reasons that I'd get a new player are things people say it's good at.

UNRELATED UPSIDE

I don't consider myself a gamer.  Debates on XBox, Wii, PSn, etc. are completely irrelevant to me.  However there are great reviews XBox has been getting and the upside on the HD and additional disk have actually made me take notice.  There is a HUGE integration opportunity in the making here.  If I decide to get a Zune down the road (still fence sitting) it might actually lead to the idea of adding the XBox for integration to my home entertainment center (vs. using the simple AV kit).  And of course this could mean a significantly bigger opportunity to cross-sell to the XBox community that is out there.  (of course this will all be post 1st gen)

I think this comment from one analyst sums it up: "You can sell 50,000 of anything to early adopters. The question is whether Microsoft can be competitive a year from now.""

http://www.usatoday.com/tech/products/2006-11-29-zune-debut_x.htm

@Havoc

The iTunes Store was introduced in version 4. Where did you read that the iPod 1G was a failure? PC users where buying the Mac-only version to hack it and make it work on Windows.

The only negative thing of the iPod 1G was the price. It had high capacity, small size, fast syncing and recharging using only one cable.

Another data point on the NPD results.  They don't even include results from Apple's own retail stores :

"NPD says its weekly POS data is culled from a selective set of retailers that are part of its monthly panel, meaning it does not take into effect digital media player sales at Apple's own retail stores, among others."

http://www.appleinsider.com/article.php?id=2272

More spin from Cesar. During the first week when it was #2 it was also high on the amazin top sellers, since then it has dropped dramatically. That's the bottom line.

How is what he said "spin"?  He didn't lie and he didn't misrepresent anything.  He said that they're #2 right now according to one source.  I don't think he claimed to be #2 in two weeks or two years from now.  He even acknowledged the drop on Amazon.

You lose.  Try again.

Gamesix -- "Spin" doesn't mean that Cesar is lying. Generally, spin means that someone (like a politician) is making a technically true statement that gives a misleading impression of reality.

There is a flurry of press reports out showing that the Zune is #2 based on a very small period of time. Microsoft is pushing the positive news as much as they can, and ignoring signs of a decline.

There's nothing particularly evil about spin; everybody does it, including Apple. But Pedro was right; this is spin.

The zune won't really be able to compete until it add lossless audio support. Then it will be ready for the audiophile

Hurry up and release this thing in the UK! My iPod keeps freezing and i'm not going to buy another one, i need change. Change is good! You better do it soon, if Apple bring out a fancy new iPod thats potentially better than the zune before it is released in the UK, i will buy the iPod.

I like my zune - the device look and feel, software inside it, customizability etc., but i am very frustrated about the zune player software.

Why the hell does it mess with DLLs on my OS? Can you guys not build it as a separate application on the top of the OS (like itunes or any other non windows media player on earth).

Has it not been recognized in early years of software industry, that APPLICATIONS are to be built decoupled from core os dlls. Why does MS not get this. I had a very irritating experience having to restart my computer and then after restart, the zune software crashing and bringing down the whole system with it.

Please get over with it, get your applications onto the top so that they are clean and easily work with other platforms. That is the only way people will recieve zune player well.

As long as you are messing with those messy Windows DLLs, the software is going to be messy, no matter how much your dev team s gonna work.

I'm aware of the difference between a straight lie and a spin.

"...our approach seems to be driving addtional interest in the space."

He doesn't go off and challenge Amazon's ranking methods, he acknowledges them.  He doesn't predict huge things, he simply says that this news is good.  He even makes a cogent argument for why amazon by itself may not be the best indicator.  And this is spin to you?  Maybe you should ignore the fanboy wars and block out cries of subliminal advertising.

Take it at face value and it is what it is.  If he were to totally ignore the amazon stuff, you'd certainly have an argument.  As it stands, i've seen a whole lot of spin.  This ain't it.

Try again.

folks, I want to remind you of the policy:

"Intelligent, lively, genuine debates are very welcome. Personal attacks? Flame wars? Not so much."

But the conversation is very interesting :)

- Cesar

I keep repeating myself, but I think my comment is spot-on...so I'll keep repeating it....

I believe this version of Zune is Microsoft's beta launch. They rush this to market for feedback and brand awareness. The real v1.0 launch will be next summer or fall when they will come out with a whole line, including flash players. It will be their "designed inhouse" line instead of the slap together Toshiba one.  

Microsoft has gathered valuable information on what the consumer want/like/dislike from this beta launch and they will address these issue with their next launch.

This is the microsoft way and I believe this is very smart. The next gen of Zune will blow the pants off all expectations like xbox 360 did to game consoles.

I can't wait....

slightly off topic but did any of you guys caught the news that Sony will not develop a PlayStation 4?

Is it true that Microsoft is working on the next gen of xbox?

If true, then can we say Softy has taken over another market? I can't believe how fast the xbox's penetration into the game market has been. Their next gen console should blow the pants off PS3...and become the #1 console for gaming.

This is why I have great faith that the Zune will grab marketshare from iPod in their next 2 versions.

You forgot to mention that the NPD stats do no include stats from Apple Stores or Apple's online store, which is where the majority of iPods would be purchased. Apparently the NPD stats also do not include WalMart. So things aren't as rosie as you're reporting.

So no wonder you're sticking to NPD. The stats flatter the Zune.

NPD published data again, and in the second week, Zune has dropped to the number five spot, with a 2.1%