Can Microsoft grab slice of Apple's iPod pie?

18-08-2006

by Maxim Kelly

Apple continues to monopolise the digital music player market, but Microsoft is gearing up to release a challenger.

Market research firm NPD Group has released data showing Apple's iPod is nearly eight times ahead of its nearest competitor SanDisk in the globally-indicative US consumer market.

The iPod had a three quarter-sized slice (75.6 percent) of the sector in the US for the second quarter of 2006, followed by SanDisk (9.7 percent), Creative (4.7 percent), Samsung (2.5 percent), while Sony came fifth with 1.9 percent market share for its digital Walkman brand.

NPD's figures do not include mobile phones with digital music capabilities built in, and analysts have warned that these MP3 integrated phones could pose an increasing threat to Apple's market share, although by how much remains to be seen.

Meanwhile, more details of Microsoft's Zune music player emerged as news of Apple's quarterly market share reached the wires. Leaked details and blurry pictures of the device -- expected to be launched before Christmas -- show that it is not dissimilar-looking to the iPod except it's black and the round interface is quartered into four buttons rather than the navigation wheel familiar to owners of the Apple device.

The plastic Zune device is reported to have an FM radio function, play videos, and have a wireless broadcast function which, one assumes, means you can swap music with other Zune owners. There is also some talk of compatibility with Microsoft's Xbox 360.

What is certain is that record company EMI has signed a deal with Microsoft to pre-load a few music videos onto the Zune player. The music company said Microsoft would pre-load tracks from Hollywood actor Jared Leto's rock band 30 Seconds To Mars, as well as electro-Britpop band Hot Chip.

EMI said that its content would be pre-loaded in addition to videos and tracks from other record companies like Universal Studios, which is reportedly in discussions with Microsoft.

What has yet to be seen though, is whether Microsoft's offering will have any one "killer application" that makes it more desirable than the metal-encased iPod.

Apple itself is expected to release an updated iPod before Christmas so there is a possibility that the next evolution of the digital music market could hinge on price.