Steve Jobs Laughs at Microsoft: ""Do You Even Know Anyone Who Owns a Zune?"

When Microsoft introduced Zune back at the end of 2006, the device was immediately positioned as an iPod killer. At that time, the Redmond company revealed only modest expectations of Zune, forecasting that the digital media player would be well just a tad over the 1 million milestone by mid 2007. Zune more than lived up to the prediction with its mediocre performance. But for Microsoft, it was merely the first step. The Redmond company's vision of Zune was focused on providing a viable alternative to the iPod, and not a device that would simply appeal to new users. In the end, Zune is aimed at eroding iPod's dominance on the digital media player market. And one year after the initial Zune debuted, Microsoft brought to the table Zune 2.0 offering the Zune 80GB hard-drive model, as well as the ultraportable Zune 4GB and Zune 8GB flash versions. Three months later, Zune 2.0 outperformed its predecessor.

"I want to talk briefly about Zune. Now, the new versions of Zune that came out this fall are doing very, very well. We've had fabulous response to the product in reviews, and I think it's quite clear we're becoming the clear alternative to the iPod. With capabilities like subscriptions, Wi-Fi, and a social experience we think we can differentiate ourselves in this space, and we think there's plenty of opportunity for that market to grow", stated Robert J. Bach, President, Entertainment & Devices Division, during his keynote address with Bill Gates at the 2008 International Consumer Electronics Show in Las Vegas, on January 16.

But just because Zune 2.0 is outperforming Zune 1.0, it does not mean that it is even close to breathing down iPod's neck. At the Macworld Conference & Expo 2008, Apple Chief Executive Office Steve Jobs laughed at Zune, mocking Microsoft's perspective that it is offering an alternative to the iPod, and downplaying the Redmond company's digital media player's impact on the market. "Was he inebriated?" Jobs asked about Bach after hearing what the President of the Microsoft Entertainment & Devices Division had to say about Zune 2.0. "Do you even know anyone who owns a Zune?" - Jobs added, as cited by CNBC.

But while Apple has pushed in excess of 10 million iPods during only the last fiscal quarter of 2007 ended on September 29th, 2007, Microsoft is not going anywhere. And the Redmond company might just account for an insignificant share of the digital media player market, but it can only go up. And building a solid universe of content, materials and offerings around the Zune device with Zune Arts, Zune Social, Zune Marketplace, Zune Originals will ensure Zune's success. Especially as Microsoft is moving outside the U.S. and possibly into Europe in the immediate future.

"In fact, we've been so pleased with the results in the United States for the first time we will begin selling Zune outside the United States in Canada this spring, and there will be more opportunities for us to expand in the future", Bach added.