Microsoft's New Paperweighthttp://www.fool.com/investing/value/2007/01/10/microsofts-new-paperweight.aspx Seth Jayson
January 10, 2007
Insert Zune joke here
For another thing, I assumed I was getting a potential collectors' item -- something along the lines of an Edsel.
But I didn't realize just how quickly the Zune would be made into a paperweight. It only took about a month, as it turns out. Steve Jobs did it yesterday, with his unveiling of the latest Apple (Nasdaq: AAPL ) iPod.
Sure, the product he showed off was a phone, something so expensive and so limited in capacity that it won't -- can't -- have the same traction as the iPod. But it's pretty clear what the next generation of iPods can (and likely will) be.
Apple simply needs to tear out the pricey phone guts, thicken the form factor to accommodate the greater storage capacity of miniature hard drives, and bam, the Zune has no advantages left. The iPod's screen will be bigger, its user interface will be prettier, and if Apple leaves that Wi-Fi chip inside, it can easily enable player-to-player file-sharing and hotspot downloads, killing the Zune's alleged "social" advantage. This also makes an instant relic out of SanDisk's (Nasdaq: SNDK ) latest Wi-Fi enabled Sansa Connect model.
Welcome back to the social
And it's a great way to get people buying more music. I think Steve is going to come around to a social model, despite his original scoffing. (Remember, Stevie once said there was no reason to put video on an iPod, either. He changed that tune as soon as the dollar signs started dancing in his head.)
That's because the "social" idea itself isn't broken. It's sound.
The problem is that Zune's implementation of the social idea is broken. In Zune's case, the players are so scarce, you'd need a 100-mile Wi-Fi range to find another Zune owner. Worse yet, the execution of the wireless share-and-play system is so hobbled by rights squabbles and stupidity that it's proved to be completely useless.
For instance, many tracks simply can't be shared at all, because Microsoft has somehow not managed to obtain or attach the proper permissions from the copyright holders. Then, the Zune isn't even smart enough to tell you up front which songs are shareable, meaning you go through the rigmarole of trying to send songs only to have the device tell you, a minute later, that there are no share rights. Annoying for sure. But it gets even worse!
Don't play nice together
However, there's absolutely no reason whatsoever for the Zune DRM system to apply the same limitations to tracks shared between users who have paid up for the Zune Pass "all you can download" subscription model, as we have at our home. This is one of those music "rental" services, where the tracks eventually stop working if you don't keep your subscription up. (A great way to try out all sorts of stuff you'd never consider paying a buck a track for.)
Here's the problem: The device already knows who's got a valid subscription, and which songs have been downloaded via subscription service. So how on earth is the software too stupid to put one and one together and give a free pass to songs legitimately shared between two subscription-paying Zune owners? That's a question we might want to ask Microsoft's supposed Wunderkind, J Allard, the guy in charge of Xbox and Zune. I doubt we'd get an answer, however -- because I don't think he has one.
Zune's foibles are annoying enough that I've stopped trying to share tunes across the pair of Zunes that inhabit my home. And if I'm not doing it, I'm pretty sure no one else will, either. If no one cares to share, there's no social aspect. At least not for the Zune. Which means, more than ever, that there's no reason for anyone to buy a Zune.
Little things, bit effect
That's precisely the point. Apple gets the details right from the beginning. Jobs and his desi