Five Reasons Zune Scares Apple

When Microsoft releases a new product, there is almost always hundreds of articles telling why it will be a hit or why it will fail, especially if they are going up against Apple. Apple practically owns the mp3 player market, and most of its fans believe Microsoft doesn’t have a chance because the iPod is so popular and is so cool. We have two in my family right now, a Nano and one of the orginal, 20 gig iPods without the color screen, dangit. But, when you take on Microsoft, you usually take on the whole outfit, with the release of the Zune, Microsoft has already announced that you will be able to buy songs through their service with Microsoft Points, which had only been usable on the Xbox live site, I believe. So you know there will be more cross promotion, and probably increased interoperability, there will probably be hooks so you can connect to Windows XP Media Center pcs to play music, and, if they are smart, free songs with everything they sell. The Zune will be able to plug into the Xbox through the USB port, a fact they will no doubt advertise on the Xbox Live site.

Mike Elgan at Computerworld says Apple is scared os the Zune and give five reasons why they should be.

1. Microsoft is hatching a consumer media “perfect storm.”
Apple fans assume iPod will face Zune in the market, mano a mano, like other media players. But that’s not the case. Zune will be supported and promoted and will leverage the collective power of Windows XP, Windows Vista, Soapbox (Microsoft’s new “YouTube killer”) and the Xbox 360.

Microsoft will make the movement of media between Windows, Soapbox and the Zune natural and seamless. The Zune interface is just like a miniature version of the Windows Media Center user interface and is very similar to some elements of Vista.

Apple fans are overconfident in the iPod because Apple once commanded 92% of music player market share, a number that has since fallen to around 70%. About 30 million people own iPods.

But Microsoft owns more than 90% of the worldwide operating systems market (compared with Apple’s roughly 5%), representing some 300 million people. The company expects to have 200 million Vista users within two years.

The Zune will plug directly into the Xbox via a standard Universal Serial Bus cable — a fact Microsoft will drill into the heads of Xbox users on the Xbox Live online gaming service. The Zune Marketplace will be integrated with, and promoted by, the Xbox Live Marketplace.

Apple faces the prospect of competing not with the Zune alone, but with a mighty Windows-Soapbox-Xbox-Zune industrial complex.

He has four more reasons in the article, available here.