New and improved Zune is still no threat to iPod

The new Zunes are coming! The new Zunes are coming! But will anyone care?

Just weeks after Apple raised the bar with a refreshed lineup of iPods, Microsoft is poised to release a refreshed lineup of Zunes. Microsoft Chairman Bill Gates showed the new Zunes, scheduled to go on sale in mid-November, to reporters this week. The original Zune now has an 80-gigabyte version; two new flash memory-based models come in 4 GB and 8 GB versions as well as several new colors, though none of the new Zunes is brown.

Going simply by the specifications and prices, the new Zunes match up closely with their iPod counterparts, the iPod Classic and the iPod Nano. The Zune flashes even have a physical shape much like the old, skinnier iPod Nanos. The general impression is that the Zune is trying hard to match the iPod, rather than exceed it; it doesn't differentiate itself enough to get noticed in a market where the iPod is king.

The new Zunes can "squirt" music to each other, as did the first generation. That feature did not prove to be a particularly strong selling point, perhaps because the songs expire after three plays. The Zunes still have an FM radio receiver, which the iPod does not, but frankly I use my iPod to avoid listening to the radio. And the new Zunes can sync their music from Windows PCs wirelessly, which is great if you hate the dreadful inconvenience of having to connect your unit into a USB port.

That's not going to be enough to lure consumers from the iPod. As Gartner Inc. Vice President Van Baker told the Los Angeles Times, "They're not going to gain against Apple because there is nothing really innovative about what they're doing."

Microsoft has said it sold 1.2 million Zunes in the first half of 2007. Apple sold 20.35 million iPods in the same period. That ratio almost certainly will not change this holiday shopping season. Microsoft needed to do something a lot more with the Zune to have any hope of eating significantly into the iPod's 70 percent-plus market share.

Even Bill Gates seems unimpressed. "For something we pulled together in six months, we are very pleased with the satisfaction we got," Gates told The New York Times.

Uh, way to give Zune the hard sell, Bill. In years past, Gates famously touted new versions of Windows as the most robust ever, most secure ever, most feature-rich ever, blah, blah, blah. The hyperbole was staggering, and often misplaced. But it was his job as head of the company and chief figurehead to sell the product. Heaven knows Steve Jobs is legendary for marketing Apple's new wares, though he usually has the goods to back up his claims.

As it stands, the new Zunes don't figure to dampen Apple's holiday cheer, while the increasingly negative reaction to Vista should help boost already rising Mac sales in the final quarter of 2006.

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