After a very dismal week at Microsoft, the company posted its Q-10 earnings late Friday afternoon. The Zune platform posted a revenue decrease of nearly $100 million, or 54%. Over the weekend critics all around the blogosphere have been calling for Microsoft to give up on the Zune.
Adam Suhn, director of marketing for the Zune platform, told the Seattle Pi that several already known factors led up to the huge lose for the company. "Everyone knows that the economy is not what it was a year ago and that [it] is hurting some folks", and later went on to say "So I think those are things that affected everybody"s sales, including Apple." Apple"s iPod platform posted a 16% revenue decrease last quarter, along with various other MP3 device manufacturers.
Suhn then announced that Microsoft was not going to give up on the Zune platform, and that the company was right on track on delivering the next generation of Zune software and hardware. Microsoft is on the road to delivering a new lineup by the end of this calender year, and is planning "fast and furious[ly]".
Suhn also told PaidContent that Microsoft was looking beyond the Zune device and has a "broader vision than just selling MP3 players". Microsoft is continuing to invest in centralized entertainment experiences that are brought together by the Zune software, that will not only be available to Zune device owners but for "other "tuners" as well". He noted that "we are in this business for the long term and [are] committed to it".
With the global economy in the slumps, and consumer spending down more now than in December, can the Zune rebound from the loss? Microsoft is apparently not going to give up on the Zune platform anytime soon, and with companies like Apple announcing that songs in the iTunes store are soon to be DRM-free, what kind of innovation is going to be required for Microsoft to firmly make a stance in the MP3 market?