The Zune chronicles, part 1

Microsoft's Zune device? (source: Engadget)

One thing is certain: I'll give much more credibility to a Microsoft rumor than an Apple one any old day (read: Apple knows how to keep secrets, Microsoft doesn't). Digital Music News has a full-blown report based on inside sources, detailing new developments on the Microsoft-branded portable media device, also known as Zune (and Xpod, and part of Project Argo). The report comes in four parts, no less. Here are some highlights (quoted text is from the report unless otherwise noted):

• Microsoft is aiming to capture 20 percent of the iPod market.
  J. K.'s take: The iPod owns about 77 percent (according to NPD) of the U.S. market with runner-up SanDisk holding about 10 percent. Twenty percent is ambitious, even if the player is a winner. Remember that Microsoft has to compete against hordes of players that live in the Windows Media PlaysForSure universe (Creatives, iRivers, Samsungs, SanDisks), in addition to competing against Apple.
   
  
• Heavy advertising starts this fall, targeting 18- to 28-year-olds. Emphasis will be placed on the Live Anywhere architecture, which might include Wi-Fi-enabled sharing, wireless music store purchases, and possibly communication and gaming features. The same energy that created the Xbox will be behind the new player (or players), and the device will be initially marketed to the Xbox community.
  J. K.'s take: Microsoft is after younger consumers who see the iPod as a tired status symbol, and good advertising is key. If you're going after Apple, you have to demystify Apple's effective (but played-out) marketing campaign. If the device has useful Wi-Fi capabilities, it'll open up doors for Microsoft.
   
  
• "Sharing can only happen between a maximum of 10 different people within a Wi-Fi range, and the experience centers around streaming content. If a user wants to purchase shared material, tracks can be bookmarked and later purchased when the device is synced to the computer...interesting community aspects will be embedded into the device, including features like friends lists."
  J. K.'s take: Sounds a little like the Wi-Fi-enabled Music Gremlin, but mostly not. The Music Gremlin allows for purchase and download of tracks from a music store as well as direct downloading from other subscribers either on a network or ad-hoc. The info provided seems to diminish the possibility of the latter feature. By the way, poor Music Gremlin!
   
  
• The device supposedly has 30GB and will be available for $399--the same price as the 60GB iPod. Also: "In terms of outward look, recent information points to three different colors, and a duo-tone approach on each. A scroll wheel will sit beneath an oversize screen, and menu options will include Music, Video, Pictures, Community, Extras, and Settings. Wireless synchronization with the PC will not be available in the upcoming launch, scheduled for November in the United States."
  J. K.'s take: The price has to come down somehow, and there needs to be a 60GB option. Everything else sounds and, so far, looks like standard WMA/WMV material, so the Wi-Fi experience had better be worth the extra $100. I'd be surprised if they went away from the brilliant Portable Media Center platform. To me, a 60GB Toshiba Gigabeat S with Wi-Fi and better battery life is the ultimate device.
   
  
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  Digital Music News: "The newer ecosystem will be incompatible with 'other Windows Media services,' placing the focus squarely on one device, and one jukebox and store...'Xbox and PC connectivity,' part of a larger plan to engage an energized gaming audience. Meanwhile, community aspects will be an important part of the release, and MySpace will be a guiding a model."
  J. K.'s take: Wow. So Microsoft, attemping to emulate a closed iPod/iTunes-like ecosystem, wants to compete with its own PlaysForSure ecosystem? Is this another Sony ATRAC3 debacle? We wonder what Creative and Samsung have to say about this.
   
  
• According to Digital Music News' source, the online store will feature "bundling, variable pricing, and subscription" and eventually video.
  J. K.'s take: Big win for major labels, especially on the variable pricing. Consumers will figure out that iTunes Music Store, with its fixed pricing scheme, offers the best deals (outside of the BuyMusics of the world) for purchasing music. On the flip side, variable pricing and bundling (ie selling albums rather than songs) will open up more content choices for the consumer. Video must be in the equation. Today, Vongo allows us to watch on the Gigabeat something that you can't on the iPod: movies.
   
  
• "Big box retail outlets will offer a nice push. Sources note that the device will be 'overwhelmingly sold at Target, Best Buy, and Walmart,' and nearly 30,000 retail outlets across the U.S. A Super Bowl spot is also reportedly in the works."
  J. K.'s take: Of course, this is deep-pocketed Microsoft we're dealing with and this is its big (and maybe only) chance. If the Zune and its ecosystem is truly a good product, the notion of capturing 20 percent market share isn't so ridiculous.