Everybody's talking about Microsoft's (NASDAQ:MSFT) Zune this week; the long-awaited musical device, which Mr. Softy seems to hope will be an "iPod killer," launches today. However, amid all the Zune hoopla, Apple (NASDAQ:AAPL) is quietly in negotiations with airline companies to bring iPod compatibility to flights.
Zune may be launching with great fanfare (such as an L.A. launch party that featured the Red Hot Chili Peppers, who in my opinion trump U2 when it comes to cool), but Apple's talks with Air France, Continental (NYSE:CAL), Delta, Emirates, KLM, and United are significant. By the middle of next year, these six airlines will allow passengers to charge their iPods on their planes. In addition, video screens in the back of the airline seats will be able to display content from video iPods.
The deal makes perfect sense from a user standpoint. I know I would be less likely to watch video content or play video games on my iPod on a long plane ride, since those activities tend to sap my iPod's battery fairly rapidly. Listening to music would be no problem, but it would be nice to have the option to use the iPod to its full capabilities on long plane trips.
From a strategic standpoint, this makes sense for iPod, too, especially with Microsoft's attempt to encroach on the MP3 player market. I caught a few snippets of a Microsoft spokesman talking about Zune on CNBC this morning, and he mentioned the company's ability to take on already proven leaders. One example he gave was the Xbox, even though Sony's (NYSE:SNE) PlayStation had a head start, and therefore a great advantage, in the console business. A long list of once-dominant businesses have wound up eating Microsoft's dust over the years, although recent years have shown increasing signs of softness at the software behemoth. (Witness its struggle to dent Google's (NASDAQ:GOOG) command of search.)
I'd argue that the expanding "ecosystem" surrounding the iPod has helped build competitive advantage for the brand. It's not just about the accessories available for the device -- though there are many, and consumers seem to have a voracious appetite for them. It's also about the places where iPod compatibility is being built in, such as Apple's deals with several car manufacturers. It underlines Apple's leadership position in MP3 players, and puts iPod wherever consumers are. That will make it harder for Microsoft to butt in. Dell (NASDAQ:DELL) had to give up on its own dreams for an iPod killer -- and many other formidable companies, including Walkman inventor Sony, have been unable to halt Apple's digital music dominance.
I know Microsoft can be a formidable foe, and there's always the saying, "Never say never." However, I think few would disagree that Microsoft faces an uphill battle ahead to disrupt the iPod's momentum and relative ubiquity.
Here's the good, the bad, and the ugly with Apple:
- Read about Apple's saucy quarter.
- One Fool talks about why he sold Apple.
- Is Apple rotten to the core?
Microsoft is a Motley Fool Inside Value recommendation. Dell is a Motley Fool Stock Advisor and Inside Value pick.
Alyce Lomax does not own shares of any of the companies mentioned. As of this writing, she was ranked 1,311 out of 12,917 in CAPS.
