SanDisk PR spokespeaker Carmella Lyman just promised to ZDNet Writer David Berlind that she'd shave her hair if the Zune was #2 in the portable media player market after this Christmas. According to NPD group, Microsoft's currently ranked 4th place with 3%, and SanDisk is in 2nd place with 10%. If the Zune really was going to jump to 2nd place after the holidays, as Microsoft Entertainment and Devices President Robbie Bach "declared", both Carmella Lyman and David Berlind will shave their heads. Don't pick up the clippers just yet, because it's not that straightforward.
First off, the Bloomberg article that was cited that supposedly had Bach stating the Zune was going to be number two after Christmas doesn't explicitly have him saying that.
``When we're done with the holiday, people will look and say, `There's Apple and there's Microsoft,''' he said. ``The reality of the numerics are that Apple will still be No. 1.''
You could interpret that as a declaration that the Zune will be number two. But you could also interpret that as a consumer mindshare statement, with Microsoft joining Apple as the (only) two competitors for the average person's money.
Secondly, Robbie Bach would have to accept the challenge by October 31, which also involves him shaving his head if Microsoft doesn't become #2. That's a tough bet for an offhand statement you made.
However, even if the bet is accepted, Microsoft will have a hard time unseating SanDisk because of the way the market works. Over 70% of SanDisk's players are less than $100, and most of their product line costs less than Microsoft's cheapest player, which starts at $149. If this is the case, Microsoft's trying to grab land from Apple, not SanDisk, which is definitely harder—even with a big marketing push come November.
To win, Microsoft will have to spend lots and lots on ads and really hope Apple messes up somehow, which seems unlikely now that the latter's products for this Christmas are already on the table.
Our point? It seems unlikely that Microsoft can pull out the stops this season to blast away on TV ad time, online ad space, and print ad pages to get the consumers informed and interested in the Zune, even with the new and improved features. At this point it's not a problem of building a better product, it's a matter of getting it in front of people's faces. And that wonderful strategy of giving first-gen Zunes the new features may come back to bite them as most those 1.2 million customers probably won't be buying new players.