Maybe Now Zune Can Take Off

By Rick Aristotle Munarriz | More Articles
September 8, 2010 | Comments (2)

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Coffee, tea, or Zune HD?

Tech blog Engadget is reporting that UAL's (Nasdaq: UAUA ) United Airlines is stocking 500 Zune HD media players for its longest international flights.

The trial finds Microsoft (Nasdaq: MSFT ) preloading the media players with content, including movies that have yet to hit the DVD market. In other words, even if a passenger flying out to Australia has an Apple (Nasdaq: AAPL ) iPod touch in tow, there is value in the Zune HD loaner.

This entertainment trial is a bold extension of the existing relationship between the carrier and Mr. Softy. United's in-flight audio switched over to 21 channels of Zune-branded music offerings, ideally promoting Microsoft's streaming music service.

Don't dismiss the power of airlines to make a difference. JetBlue (Nasdaq: JBLU ) flights began offering select Sirius XM Radio's (Nasdaq: SIRI ) XM channels six years ago, when XM still had fewer than 2 million subscribers. Sirius and XM combine for 19.5 million accounts today.

The Zune HD test may not bear fruit overnight -- even on a red-eye flight. Passengers are unlikely to toss their Apple or SanDisk (Nasdaq: SNDK ) players into air-sickness bags and hop on Microsoft's platform right away. However, it will make consumers more aware of the Zune brand and its related gear.

The flight may get bumpy along the way, but Microsoft hopes that it knows where it's landing when it comes to United's captive passengers.

Is this a good or bad move by Microsoft? Share your thoughts in the comment box below.

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Microsoft is a Motley Fool Inside Value selection. Apple is a Motley Fool Stock Advisor pick. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz is proud to say that he never bought one of those brown Zunes, but he knows someone who did. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Report this Comment On September 08, 2010, at 4:20 PM, deemery wrote:

Maybe pigs can fly, too... I'm sure UAL got a -great price- on these pigs. The question is what they'll put on them. I'm no fan of most music (I'm looking to upgrade to a 160gb iPod which should just about hold my mostly classical collection.) Without an "onboard music store", seems to me you'll be stuck with MS-UAL's music selection, and I'm -afraid- to hear what they put on there based on both corporate taste and cost/sponsorship considerations. ("101 Strings play Greatest Hits of Zampfir"? :-)
And as far as XM is concerned, I wonder if they counted my wife as a subscriber? She got a "6 month trial" with her new car, which she never activated, but we sure got a lot of mail from Sirius XM as if we did.
As someone once said, "You can move a lot of product if the price is zero..."
Report this Comment On September 09, 2010, at 1:00 PM, cybdiver wrote:

Proprietary hardware is evil. The Zune uses it's own special adapters. It's like owning an Apple. I don't want an extra charger for my player I want the same one as on my phone, my camera etc.
Also I'm not paying for an advertising box.
What I want is better quality audio. I hate that you buy these players and they give you cheap earphones. Won't someone make a quality player? or how about a player with a slot for SD chips preloaded? Okay now you have my attention. Buy to get a whole new player? a loaner filled with ads? thanks but no thanks. I fly alot and I am fussy about what goes into my head. I don't want to become a walking zombie headed to the store to buy things that Delta, or Microsoft programed into my brain.

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