Microsoft’s weak quarterly earnings report is pushing some to call on the company to abandon its once-hyped “iPod-killer”, the Zune.
According to a Marketwatch story, investors think it’s time to dump the Zune and focus their attention on competing with Apple’s iPhone:
“The market reception for Zune is so disappointing that many retailers have even stopped selling it altogether,” said George Kurian, a vice president at Tradition Capital Management LLC, which owns Microsoft shares.
Kurian said Apple has successfully outflanked Microsoft by shifting its iPod users to higher-margin devices like the iPhone.
“Microsoft should abandon Zune and follow Apple’s strategy to try to make its presence felt in the high-growth smartphone sector,” Kurian said.
The Zune had a lukewarm reception when it was introduced, because the device failed to significantly differentiate itself from both the iPod and other iPod competitors. Marketing blunders, like the PR fiasco of the Zunepocolypse and Microsoft’s inability to generate interest with teens, have caused Microsoft’s Zune revenue to plummet.
What do you think? Is there still hope for the Zune brand? And is there any hope for a Zune phone?










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