Microsoft's market projections for the Zune digital media player are modest. But, in a sense, the forecasts are also realistic judging by the device's performance. While being on track to become number one, Zune managed to grab the number two spot on the US media player market the second week from its release. This success was short lived and consequently Zune dropped to number five.

And as Zune has sinked in the sales ranks, Microsoft has put forward a forecast according to which the company expects to sell in excess of 1 million Zune devices by the start of July, 2007. "We're forecasting just over 1 million units for the fiscal year," said Jason Reindorp, marketing director for Zune at Microsoft. "We feel pretty good about that number."

The Redmond Company has even reduced the status of the iPod killer to a conversational level. "It's great to have all these iPod killer conversations, but we didn't expect to beat them in terms of any sales this holiday," said Bryan Lee, Microsoft Corporate Vice President, Entertainment Business. "Our goal was to get out, get in the market that really they've defined, to their credit, and become relevant, and then go from there."

Microsoft has grabbed 2% of the US digital media player market with just the 30 GB versions of Zune. "We think that Microsoft had relatively modest expectations in terms of unit shipments and sales going into the Zune launch," commented IDC analyst Susan Kevorkian, adding the IDC forecasts that Microsoft will push approximately 500.000 devices by the end of the year.

To say that Microsoft is lagging behind Apple is to downplay the situation. This because while Microsoft predicts Zune sales of 1 million by mid 2007, Apple sold over 31 million iPods in the same period of the past year.