Zune Team Splits Up Prepares for Hardware Divorce
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After the Microsoft purging in early January no one department was left untouched including the team working on the Zune player. All of Microsoft’s divisions are losing money except Windows, Office, Tools and Business CRM
Although they deny it, it is related to the precipitous drop in revenue in the last quarter (down 54%) Microsoft recently announced that it would split the Zune team in two. [TechCrunch Link]
The software and services portion of the Zune team–the bulk of its staff–will be added to the portfolio of Enrique Rodriguez, the vice president who currently runs Microsoft’s Mediaroom and Media Center TV businesses. The hardware team, meanwhile, will now report to Tom Gibbons, who also leads the hardware design efforts within Microsoft’s Windows Mobile unit.
This is because they realize that the Zune cannot drive it’s own market and so it must be made to be relevant to the consumer other ways and that including rationalizing the Windows Media Player and Media Center.Their strategy with the Media Center and Windows Media Player is all over the place, unlike the Quicktime Engine which is in every product that Apple has, from the iPhone through iPod, Apple Tv, Macs and the professional editing tools, so now is a good time as any to bring the groups together.
Microsoft’s portable strategy, although they have possessed one for the last 10 years, is in tatters and they have a very limited window to fix the problem. When they originally created the Windows CE they were in market where they were able to tie it to the Microsoft Office and Exchange. But what is inexplicable is why they let the Blackberry eat their lunch with Exchange integration. The Blackberry Enterprise Server is a truly awful product. (If you have set it up you will know). Microsoft needs to move fast to tie the Zune Software into the Windows Mobile 7 platform and create an experience close to what the Iphone has. A Windows Media Center/Zune/Mobile 7 integration effort will pay dividends in the future as people will be able to consume their video and music over multiple devices under a single account. Finally as I suggested the Windows Live/XBox Live presence to support all the portable devices as well as Media Center to tie the whole experience together.
Whether or not the Zune Player will survive as a Microsoft product is unclear. There is no reason why they cannot create a reference design and let others develop the hardware. After all the Zune Player is the Toshiba Gigabeat Player. Maybe they can give away the Zune player with the Xbox or tie the Zune together with an Xbox portable player.
Whatever they may do they are running out of time to make a difference in this market and they have many moving parts. No company has every tried to execute on so many levels. Apple has taken 8 years to get to where they are, Microsoft has about 18 months.
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The issue I have always had with Microsoft being in the Portable Media market, is all other things being equal, can they make money doing it.
I get the strategy of investing in products over time, but after almost 10 years their consumer/entertainment products division is still bathing in red ink (along with internet business).
As a shareholder, either get a strategy that can be articulated as to why they should be in this business, or get out of the business.
i agree why cant they just make a reference design.. i dont see a reason not to
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thanks for sharing this issue with the users.thanks for the information.
Microsoft really can’t bring out good strategy for it’s new product and old products too.
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