Trouble For Microsoft's Zune

Posted on January 24, 2009

Zune 80Some data contained in Microsoft's recent SEC filing reveals that sales of its Zune MP3 players fell in the final quarter of 2008. The news has some tech websites posted articles titled Zune Death Watch. The Wall Street Journal's Digits blog says Microsoft's 2008 Zune holiday revenues were $100 million less than its Zune holiday sales in 2007.
In the filing, Microsoft mentions a steep drop in Zune revenues in the holiday quarter compared to the same period the prior year. "Zune platform revenue decreased $100 million or 54% reflecting a decrease in device sales," notes the filing.

Those figures imply Zune revenue during the holiday 2007 quarter was around $185 million and that it fell to $85 million over the most recent holiday period.
Digits also writes that unless Microsoft jazzes up the Zune the gadget is probably "headed from low to no market share." That's probably true. The widely reported Y2K9 error that plagued some Zune owners around New Year's won't help Microsoft with its Zune sales woes. The Zune website is still active with forward promotions like a Valentine's Day Zune design so there's no sign the company is ready to ditch its portable music player.

Photo: Microsoft

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