How about mentioning that the NPD stats don't include Apple Stores, Apple's online store and (I believe) Wal-Marts? The first two being a very large part of where iPod sales come from.

And the percentage of market share is for that week in sales. Can be a bit misleading if someone says "we have x% market share". Which you don't have. It's the percentage of sales for that week. As mentioned, excluding the places where most iPods are sold. :)

It should be noted (thanks Diego!) that NPD doesn't include Apple retailers. I'm pretty sure that iPod is outselling Zune at the Apple stores ;)

I thought the way that I stated it ". . .second week, Zune has dropped to the number five spot, with a 2.1% market share. . ." was good.

For as long as I can remember, though, MS has used NPD data to gauge how we're doing in the retail market (long before the days of Zune): http://gamerscoreblog.com/team/archive/2006/02/13/532182.aspx    

Jesus....Sandisk killed.  Forget beating Apple.  MS may have an extremely hard time beating Sandisk and their extremely discounted players.  They're quickly becoming a household name with people who don't have hundreds to spend on ipods.  In fact, I know more people with sandisk players than Ipods.  Go figure.  I guess it's time to whip out the pixas or whatever it's called.  Still, how can MS compete on price.  Sandisk makes the frickin' memory that goes in their own players.  Anyway, I hope you guys aren't serious about waiting until next holiday season (oct/nov) to drop new models and refresh the product line.  We can have the Zune's funeral now if that's the case.  If it's going to take a full year to develop new models and refresh the product line, Steve Jobs will undoubtedly have a grin that reaches from Redmond down to Cupertino...and sandisk will breathe a sigh of relief.  Nimble and Microsoft, together in the same sentence.  We're not quite there yet....not quite there.  

You guys are waiting to release Zune 2G to sell hundreds of millions of players at a lost.

This first Zune player is nothing but a decoy.

Thanks Admin! :)

I think this is mainly due to the unfair reviews given to the Zune.

Anybody that spends a week or so with the Zune, I've seen tends to give it better review than those who spend a day with it.

Things have to change, and some people are just too reluctant to change. Just give it time, and I'm sure you guys will do great!

Diego - call me Cesar. Admin is just my stage name ;)

HAHA suckers!!!!!!!! Thats sucks!!!!!!!

To put it another way:

"...Zune, captured 2.1 percent of units sold, tying with Disney and coming in behind Apple, SanDisk, Creative and Memorex."

http://news.zdnet.com/2100-9595_22-6140649.html

Well, it was a noble attempt. Zune tied with Walt Disney for fifth. I didn't even know they were selling mp3 players. Oh well

I deleted that last comment because it attempts to insult zune customers.

Time to crank up the "I'm an iPod and I'm a Zune" commercials! ;)

Hi Cesar -- woulda been helpful if you posted some additional flavour so that the hounds wouldn't pounce quite so hard.

Units sold appear to be equal to that of the previous week according to the NPD Group report.  In addition - check this out - the average price of a Sandisk player sold during Thanksgiving week?  $51.

haha  Microsoft just didn't compete in the Thanksgiving price slashing extravaganza.  Actual sales held steady.  

Looks like a good week to me!

(with *supposedly derogatory comments about microsoft customers deleted*..., Cesar, can't face the truth....?)

.....thud! That's the sound of the cat hitting the pavement. The first week's 9% market share was the cat bouncing off the pavement.... (sales no doubt fueled by purchases made by MS Employees). At 2%, the cat is on life support...joining another famous cat Napster...

I know microsoft has promised to spend billions to spoil the party... so it will be a long march into oblivion for Zune...

Rest assured Zune will join Zima and other soulless products engineered by focus groups.

Paulstorm is right.  Not a bad week if you know anything about retail sales.  SanDisk had almost 40% of the market share for that week.  Most that was taken from Apple.  Sure they have more to give, but for Zune sales (numbers of units) to hold steady with no price point reduction is not all bad news.

much better :)  thanks bounce.

ouch that looked really bad until Paul explained it. I am perfectly happy with my Zune, and other are interested in buying one, I highly doubt this is "a sinking ship that won't make it to 2g"

I still say that more advertising needs to be done to get the brand and product known to everyone who is not a techie or lives or commutes with a techie (practically everyone). The TV Ads need to convey more about the product. Sorry to make the comparison (I'm a huge Microsoft enthusiast, but still) to Apple's marketing, but we need to remember one thing: Apple has the product established, so they can have all of these weird ads with absolutely no details about the product and still manage to get some people to purchase it. Zune still needs to establish the product before the brand so it can be known and then enhanced. The current ads for the Zune (which I'm sad as a Zune fan to have only seen one on TV; I mainly watch MSNBC and CNBC) only try to establish a brand image, but there is still no product image by which the viewer can relate to. Now, I'm no marketing expert, but I don't think that it takes one to claim that the real average person (a non-techie) really desires to take the time to investigate what Zune.net offers and decide to buy a Zune because of it). As a Zune fan and owner, it's really cool to see the ads [only on the web, :(] but that is because I already know what a Zune is and I can get excited about it. That is not the case with everybody else, and something needs to be done about that. Plus, we continue to read all of these reviews in which the individual claims that if enough time is given to the Zune, the user-experience is better than of the iPod's, but how is it that a person is going to experience a Zune if they are not a aware of it? So, the conclusion: (1) Create massive, I'm talking massive (because no one advertises more than Apple) public awareness with a huge marketing campaign (2) after creating a product image, create a brand image that can link to "coolness" to entice the average individual (3) promise and deliver new services that ARE possible NOW that make the product match and/or surpass the competition. Very easy for me to say all of this, but I know Microsoft is not very accepting of #2 titles, so make it happen!

PS: Happy Birthday! "Estas son las mananitas que cantamos al Rey David...."

The question is who are you marketing to? I'm fifty and have both a Zune and a 5.5 G iPod. I use the Zune for work and the iPod as a backup in case the Zune's battery goes dead. I like the sound of the Zune better than the iPod as well as the fact I can show pictures of my kids to coworkers. Zune's marketing appears to be geared toward a younger generation that has never owned a MP3 player. I think the baby boomers are a good market too. There's still a lot of us around, you know. The Zune marketplace (which I also subscribe to) should also acknowledge "Classical" music as a genre. It's frustrating to have classical music lumped under "More" as a genre. Apart from that, I eagerly look forward to the next firmware update.

I normally don't like "me too" posts. But there were several very good points here.

Paul is very correct. These weekly sales results can be very misleading. The key metric is that Zune's second week sales volume held steady. That directly refutes the "Interest has waned" crowd. Granted, you would like to see growth...especially this time of year. But it isn't bad news.

And MikeK has raised my biggest gripe about Zune Marketplace(other than no video/netcasts of course)...My genres are relegated to "other". I'm primarily a Classical/Jazz/Christian Contemporary listener. It would be nice to have more genres represented at the top level.

Keep up the good work Cesar! You have a solid foundation with this product.

I'm 16 by the way, but I understand what you (MikeK) mean by the audience. I do agree that the audience could be expanded to include up to the baby boomers and create a professional setting, but first the younger generation needs to have this product image established. But even with the current audience of 12-25 (or so it seems) I see little or no effect on my friends (I am very sad when I hear that someone still does not know what it [Zune] is, as most of my friends are not techies and rather watch those MTV and VH1 -like channels. They say they see the commercials but are rather unimpressed after all of the commotion and marketing I have done with bringing binders with Zune logos printed all over the covers, a sticker I won on a site, some Microsoft shirts I purchased and brochures I took from a local store, I guess they expected more after all of what I had done. It's not like it's easy for me to say all of this, and I don't admit this that easy infront of them, but to you, Microsoft, we need to be honest so it can be improved. Yet, I remain confused on how I should react and whether or not to post commments like these, because deep-down I still know that Microsoft is way ahead of us and prepared for the next step. But before you guys start using the tricks under the sleeves, can we please not dismantle any successfull possibilities? Again, I don't know how much my opinion matters, but considering the fact that I communicate and see the people Microsoft is targetting, it should be somewhat considered since it does not have any of the stone-cold qualities of research, but more of a direct and raw and pure source. Opinions?

Upfront Disclosure: I own shares of Apple Computer.

I think the reason Zune is seen as a "failure" to many people is that the expectations were so high, with so much potential. That GUI on the player is beautiful. That said, the player is not. I have not been able to see a Zune in person (I'm Canadian :P) but the problem is Zune is not photogenic at all (I'll give it the benefit of the doubt that its brown colour doesn't match the first item that leaps into everyone's head when brown is mentioned).

Then there's the crippled Wifi etc. How sweet would this player have been if it had wireless headphones for it?

Well I rambled, to get back to the Thread, the Zune is a high-mid range player. Most MP3 players sold, whether that be Sandisk, Apple, Creative or whoever, will be from the low end. Like someone mentioned before, Sandisk may have a larger % in units sold, but the price per player is much lower.

Still, I don't understand Microsoft's strategy. They're saying they're willing to pour millions over several years to make it a success. Why not spend millions NOW to make it a success? Undercut Apple, make appealing mainstream commercials (really... the "Social" message is weak when you're the only one with a Zune... that has to be built later. No one wants to be the only one at an unpopular social) Don't fire a warning shot in the air when joining a shootout! It's not bad for a "first try" (though arguably its Toshiba origns are not), but it's also 5 years late. This year was seriously the best year MS could have hoped for, with Apple only really releasing updates to their line after all their product delays. If Apple gets the kinks out of the products they have in development, you're looking at potentially a touchscreen ipod, iPhone, iTablet, iTV, and perhaps even more.

Anyway, that's my rant for today. I plan to sell my apple stock after the iPhone comes out, so Microsoft, things you need to do next year: Prettier player (in real life and photos), more player choices, do something more useful with the wifi, make some new commercials (have you seen the new Shuffle one?!?). Though the stock trader in me wants Zune to fail, the electronics geek wants them to do well. Competition keeps all the companies on their toes, innovating, and prices low :)

I agree, the ads should be more blatanat, and should scream...Zune HAS ARRIVED! so far the ads are a bit vague....ok some guy is DJing and listening to an MP# player....might as well be an iPod. You should have an ad really demonstrating the Zune music sharing feature. E.g two dudes at a college sharing songs or something. Todays generation have short attention spans, you have to hit them in the face with something.

Yes I agree! Your maketing sucks.  Please take the time to read this post on Zune Scene:

http://www.zunescene.com/forums/index.php?topic=3723.0

Paulstorm, where are these unit numbers? For their numbers to hold the same, the rest of the market would have had to have ballooned by more than 250%. Possible, but less believable than Microsoft slipping.

Was just purchasing music from the marketplace....it doesnt yet have early Janet Jackson music...are you kidding me?! stop sleeping guys. Also, I want my Kirk Franklin....get on it guys...chap,chap lads.

Incomplete Saturday Night Fever soundtrack....aaaaah!....had to add that one. :)

It is interesting to hear people say that the statistics are misleading, then pull *one* little kernel out and hold it up as good news.

It is interesting to see Cesar call it "the second week of a multi-year plan", but no one talks about the fact that MS attacked the market the same way with Plays for Sure and before that with the Portable Media Centers.  

Why will this be different from the Plays for Sure and Portable Media Center initiatives?  

I like the players UI.  I like the sideways video, the feel of it in the hand.  But I, and I suspect many iPod users are tied to the platform in more ways than one...for example I have money invested not just in the player (bought refurb) and cases, and music...but an expensive speaker set/dock that I received. as a gift.  

Yes, it's a nice player...but was there really a need for it on the market?  What need are they filling?  Whats different enough to make me skip past not just Apple but Sandisk, iRiver, Creative, et al?

I think if Apple were on Gen 1, 2 or 3 MS could complete...but not now.  It's so very different from the video game market.

Maybe it is heresy, but I think the MS that emerging under Ozzie is creative and dynamic, and could have found some ways to build on the iTunes/iPod market and make it better for music lovers.  The mac side has a lot of rich software that isn't available for Windows.

http://edge.playlistmag.com/images/content/2006/12/8.updateattack1.jpg

What in the world is going on in that picture?

Ahh...a lawn-rolling game.

So no Vista update yet.

Vista's released to Volume Licensing which means most major companies in America have Vista available now. The Zune I own I'm not even using now because it won't work with my Microsoft Operating System.

I let the Marketplace subscription end because Videos aren't offered.

That's update number 2 on the Zune Experience.

Majority of the problem of dropping to number two is most large brand stores known for MP3/Media players are sold out. I have at least three stores in my area that are sold out, and have had multiple customers turned down looking for it. Main retailer that NEEDS to bring this into brand awareness is Office Depot, Staples, and all the gaming stores that carry it!

Cesar,

Are all the hacks for the Zune going to create a problem with the music companies? It seems as though every precautionary safety-net (3x3, etc) has been pulled out from under them. Will Microsoft, like Apple, have to crush the hacks to keep the Music industry happy?

The Zune could still drop a few spots and would not mean that much. Let looks at figures in 6 to 9 months to see how the Zune is performing with a single model(or 2 or 3 by then...:-)). My bet is it will drop a few spots before climbing the chart again.

my brother-in-law just became a 1st time mp3 player owner. Guess what he bought?

He bought 2 ipods. A shuffle for my sister and a video ipod for himself.

He was looking at the zune because it has FM, but the Target employee told him the zune was getting bad reviews.

So he bought the ipods.

BTW, he bought a xbox360 at Target in April and it just died.  There was only a 90 day warranty and he had to pay to send it to Microsoft.

Microsoft has a tarnished image in my family. I would not recommend their products to anyone.

Its very important to see what customers want before next year and the 2G zune!!!

Customers DO NOT want:

wireless that is pointless

DRM all over

Zune Marketplace that is slow and non responsive

Wow Cesar, you need to get with Larry Hyrb (Major Nelson) on how to run an astroturfing site.  The point is *not* to post negative reviews about your product.

MikeK:  I have to echo the "boomer" suggestion...my mom just bought a Zune (her device of such kind) and can't believe how much she loves it.  The first thing she asked me is how to delete the preloaded content "punk rock" stuff...she wasn't too impressed with it ;-)  I understand how the zune has to become "hip" with the kids to eventually overthrow the iPod, but there are a ton of aging customers with even more disposable income that would like to own a Microsoft-built player...if only they could find out that such a thing exists.  Easier said then done, of course.

bradk:  I agree with your comment about the zune not being photogenic.  In fact, the first live zune I saw was in a Target in a display with a deathgrip guard on it that made it look as bulky as people were complaining about.  The next one I saw was in a Walmart iPod display (of all places!)...and it also looked unimpressive there (neither were turned on).  But once I was able to hold one and use one I was blown away by how small, light, and cool it looked.  Definitely not an iPod, but very cool in its own way (love the finish, doubleshot, UI, etc...).  Pictures just don't do the thing justice, and the displays I've seen don't either.  This is going to take word-of-mouth unless something changes.

If anyone cares. I bought a zune and I'll probably return it soon. Battery life is very bad. I have to charge it every day and I don't listen to it much.

Last night I 'auto shuffled' the Zune and in the morning it couldn't play any song on it - says the song cannot be played (the software did have the message "You can disconnect your zune" displayed).

So who takes into account the returns? I really don't want an ipod but I don't see an alternative.

ok..I'm a longtime Windows user.  A friend (another Windows fanboy like me) talked me into getting iTunes a few years ago to shop for new music and burn CD's.  

The iTunes app, as he told me was actually very well written. It led me to buy my first iPod, since then we now have 6 iPods in the family.

So now I've become excited about Zune.  Before I buy one I have installed the Zune software.  (Especially cuz a good friend's indie album is on there now so I want to support his project)

Unfortunately the Zune software crashes every single time I run it.  Usually when I try to login with my Windows Live ID.  Lately it's been complaining about not being able to download "Windows Media" components.

So until this is resolved, I can neither download the album  ("Tru Love" by Fizza) nor am I encouraged to buy a Zune.

So hopefully this software issue will be resolved in 2007.  hence my name :-)

best o' luck friends,

ZL-2007

I am in early 40's and my eyes are starting to go.  While I can not read iPod screen without squinting the Zune display is very easy to read.

I love my Zune and 3 of us at our office now have them. People of our generation generally are Microsoft fans as well having made a good fortune on their stock back in the day.

Start advertising the Zune in AARP Magazine and CNN and other news sites!      

Everyone has their eyes fixated on device sales.  You think Sony/Nintendo/XBox sales teams look at device sales?  Sure, it comes right after Game sales.  I'm more curious about the growth rate of Zune's subscriber base.

 I think the reviews have pointed out fair weaknesses that need to be addressed.  The software was problematic when installing it.  The lack of PlaysForSure support is a big negative.  No video downloads in the store.  Limited video format support in the player itself.  No Lossless WMA.  The sharing feature is too encumbered by the three play / three day restriction.  Microsoft Points system is cumbersome and not necessary.  You can't use the system as a removable hard-drive (Unless you hack it, which I'm sure they'll fix.)  And there is no word on what additions/features are coming and when.  

 That's a pretty huge list of problems.  Addressing some of these and improving the experience will allow people to speak better of the Zune.  Right now, people are waiting, because they have heard the experience is not better than the iPOD.  Take some hints from the video game companies and leak some future features and release dates.  Build some excitement and get people talking about what it will do, not just what it doesn't do now.  

K

Kevin "And there is no word on what additions/features are coming and when". "Right now, people are waiting, because they have heard the experience is not better than the iPod."

I have to agree with you 100%, it really hurts their case that they haven't been more furthercoming about their plans.  I'm not sure if its in their interest to wait till CES to make announcements.  They cannot forget that they are competing with today's leader Apple but have a threat from Sony (http://www.engadget.com/2006/12/05/sony-planning-ipod-itunes-like-infrastructure/).  Sony has more pieces in place than Apple.  Zune is in the same position with the added advantage of having MCE PC/Extenders, MarketPlace, Live Spaces and SoapBox.  The trick for the Zune team is to keep existing users happy while getting tight integration among MCE/XBox/Extenders/Zune devices and having access to MUCH MORE CONTENT!

Hey I hear your feedback, folks - thanks for dropping it. FWIW, if it were up to me, I would post up our entire product roadmap . . . Alas.

Solution to get around that roadmap NDA: Kevin Rose + Beer :)

I predict this will be a rough holiday season for the Zune, especially with so much negative reviews. Any future road map announcement will have to be after Christmas, because no one would buy if they know better Zunes are coming. Maybe they should layout their planed firmware updates.....

Do they keep track on Returns?

Cesar,

Is a Mac version of Zune Marketplace even on the table? Many  pro producers are on MacBooks and and a lot of them are starting to get out on YouTube so they may start to have more influence than ever.  

They may never be eligible to like Zune if they can't run it?

From Bloomberg.com:

Microsoft Will Sell More Than 1 Million Zune Players by June 30

By Dina Bass

Dec. 6 (Bloomberg) -- Microsoft Corp. will sell more than one million Zune digital music and video players by June 30 in its bid to take share from Apple Computer Inc.'s market- dominating iPod.

That level of sales should allow Microsoft to meet its goal of taking the No. 2 spot in the market for media players with a 30-gigabyte hard drive, Bryan Lee, a vice president in Microsoft's entertainment business, said in an interview. Lee declined to say how many Zune devices Microsoft has sold so far.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net ;

Last Updated: December 6, 2006 12:32 EST

http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=MSFT:US&sid=amWfi6bM.f48#

From CNet:

Software fix coming

Microsoft is also readying its first software update for the Zune. The update will allow the Zune to work with Windows Vista, Microsoft's just-finished operating system, which is now available to businesses and goes on sale to consumers in January.

The Zune software update, which is expected before Christmas, will fix some minor glitches and add some performance and other improvements, Microsoft said. The company won't include major new features in the release, however.

"It is plumbing stuff, but it is stuff customers will notice and appreciate," Reindorp said. "It's not going to be a whole new wireless scenario or anything like that."

http://news.com.com/2100-1041_3-6141431.html?part=rss&tag=2547-1_3-0-20&subj=news

And in that same time period, Apple will likely have sold another 30-35 million ipods, with a cumulative total of 90-100 million devices sold by then. That is that challenge for Microsoft, right now.

I have no doubt that the Zune will eventually have a meaningful share of the total devices in the market, but until the iPod juggernaut slows down, it will be a real challenge for Microsoft to significantly erode Apples marketshare.

I'm interested to see where Microsoft takes the Zune, and equally interested to see Apple's next steps.

I believe that apple will come out with something with in the next year to combat the zune and make the zune look foolish.  Don't get me wrong, I love the zune, but the zune marketplace sucked. Most of the bands that I listen to don't even show up in the marketplace.  So there was no reason for me to even sign up.

The Zune will definetly take a good share of the market.  The only reason why the Apple iPod is even the leader is because of mass advertising.

Zune will come out the leader once new products start coming out.

slater - which bands do you listen to that you couldn't find?

The zune provides the first real shot at an alternative eco system to iTMS. The problem that has to be surmounted is the iPod is a mature product with a broad range insofar as it's eco-system is concerned. I guess zune and MS had to start somewhere, but I don't think this generation of the zune was the place.

Today I noticed a story that a company rep hopes to ship a million zunes by the end of the financial year ending in june of 07. Shipping? What about sales? Are they the same thing?

Sadly the zune is not a consumer's friend just yet.

Here's what I'd change ASAP.

-Allow the zune to be used as a hard drive via a firmware update.

-Renegotiate the usage rights (DRM)-loosen it.

-Lower the price by 20 to 30 dollars. After all, why not get a gigabeat-virtually the same media player and less expensive.

-Rethink the Playsforsure abandonment.

-Get a better spokesman than Ballmer. The dude's about business, not music, cool or whatever sells mp3 players.

-Points? Dump points ASAP-use dollars or expect only the koolaid drinkers to buy.

Next gen zune.

-Form factor-change it. Thiner, rounder-keep the texture.

-Drop white and brown. Try Red, gun metal grey, and maybe yellow.

-Slightly increase the size of the nav buttons.

-Better headphones.

-Bluetooth sync with PC, Marketplace, headphones.

5th for now, but it can only get worse for the 1st gen zune. I hope the zune team can get a better offering out quickly enough to stave what will be a zune killer in the next iteration of the ipod-the true video ipod, which, no doubt is being tooled to highlight what the zune cannot, but should be able to do.

Its interesting to hear how people expect the Zune to have taken half the market share after less than a month out. Relax people...Zune is getting there. In my opinion a pretty good start. I mean..they'll already have Apple playing catch up with the wireless feature and bigger screen size.

Right Franco, because we all know Apple hasn't been looking into WiFi or bigger screens. Patents submitted by Apple, before the Zune project was even started, would discredit the "playing catch up" theory. Perhaps current technology limitations, music industry support and movie studio participation are preventing the features you mention from being useful or major selling points at this time.

If anything, Zune was released before their WiFi was remotely cool or useful. In fact, I hope Microsoft didn't taint the consumer's desire for WiFi.

Microsoft is known for releasing "this product does it all" gadgets that don't catch on because "all" is so poorly executed.

Matty, you raise a few interesting points there. Thanks for commenting in this site! I would say that filing a patent application for a feature and bringing a product to market with a feature are two very different things.

About Zune releasing wifi, the existing wifi capabilities is just a first step. We have the ability to expand on the existing capacities. (see Xbox launching with broadband capabilities, but Xbox Live launching a year later).

And I would say Zune +doesn't+ do it all: no calendar, no clock, no games. And some products do catch on. Xbox caught on. smartphones caught on. and we're taking a similar approach with Zune. and it's catching on. Sure, we've had a few failures - Bob anyone? But every company has had a few hits and a few flops.

Anyways, thanks for reading, and looking forward to reading more thoughts!

I mean come on!!!!111 you don't even have Vista sopport how craappy is that???????????????? not even supporting your own type!!!!!!!!!! WEAKLINGS!!!!!!!!!!!!!!!!! #%&*! zune