Zune and the Apple way

Early last year, Bill Gates commented on Apple’s success with its “closed” iTunes/iPod system and laid out Microsoft’s very different, “open” strategy for the music-player market:

Apple is doing things the way Apple does – where it’s the Apple hardware and the Apple store. That’s great for them. We’re doing it the Windows way … In the long run, there will be a lot of people making digital music players, and we think that there will be a very different market share with dozens and dozens of companies. And other than Apple, all those player makers are signing up to work inside the Windows PlaysForSure ecosystem.

“Other than Apple and Microsoft,” he should have said. Microsoft’s new Zune player, formally announced yesterday, represents an about-face for the company. Instead of going the “Windows way,” Microsoft is going the “Apple way,” creating a proprietary system combining hardware, software and store.

The Windows way worked for PCs because PCs are general purpose devices that become more attractive as more software and peripheral devices become available. An open architecture encouraged the development of lots of software and devices that expanded what a PC could do in ways that customers valued. They were even willing to put up with crashes and reboots and driver conflicts and all the other annoyances inherent in managing complex, heterogeneous systems. A special-purpose device, like a music or media player, is a different beast altogether. Customers want it to do what it’s supposed to do, and do it really well – and look good while it’s doing it. It’s fine – and in fact valuable – to have a lot of compatible accessories, as long as those accessories don’t mess up the internal workings of the core system itself. That’s been the Apple way with iPod, and now it’s the Microsoft way with Zune.

A lot of people still want to believe that the approach that worked for a general-purpose device will ultimately prevail for a special-purpose device, too. But why should it? They’re two different things, as customers plainly recognize.

6 thoughts on “Zune and the Apple way”

  1. rajesh

    Yet again Steve Jobs has shown his ability to have out-think his peers with regards to the industry direction. The man is a good (though he got the name of the device wrong)!  An excerpt from an interview given to Newsweek in January 2006:

    Question:At the Consumer Electronics Show last week, there didn’t seem to be any iPod killers.

    Steve Jobs: The problem is, the PC model doesn’t work in the consumer electronics industry, where you’ve got all these companies and some does one thing and another does another thing. It just doesn’t work. What’s going to happen is that Microsoft is going to have to get into the hardware business of making MP3 players. This year. X-player, or whatever.

    http://www.msnbc.msn.com/id/10853916/site/newsweek/

    And like the CFO, Peter Oppenheimer, declared in his analyst con call last week:”We’re not sitting here doing nothing”

  2. Frank Hecker

    I very much agree that music players (and media players in general) are not general-purpose devices like PCs and thus providing an integrated solution (like the Apple iPod/iTunes/iTMS combination) is preferred by end users to a PC-like “mix and match” approach. However it’s worth noting that this situation is not necessarily inherent in the nature of music or media players; after all, traditional TVs are special purpose devices as well, but the TV market had (and has) multiple manufacturers, multiple suppliers of content, multiple content distributors and distribution mechanisms, and multiple independent vendors of accessories.

    In my opinion the problem with present-day music and media players is that interoperability and standardization are artificially impeded by DRM schemes. This puts a premium on a vendor like Apple that can offer a integrated solution where the interoperability problems caused by DRM are (relatively) irrelevant as long as you don’t try to stray outside the confines of Apple’s walled garden.

    In the absence of DRM I see no reason why the music and media player market wouldn’t evolve to include modular “mix and match” devices, just as Clayton Christensen contends; I think Christensen’s theoretical framework is sound, he just forgot to account for the non-market factors of DRM and the legal and political forces promoting its use.

  3. SidneyV

    There is another problem: industry players now recognize that playing by Microsoft standards within the Microsoft ecosystem produces profit only for Microsoft. So only wannabe B or C players participate in such ecosystems. First tier players with good design talent no longer want to ship all profit to Gates & co. Even for X-Box Microsoft tried to sucker OEMs like Dell or HP into making the box, but they politely declined.

    This is becoming true even in the software industry, where there is little interest in building a company “on” Microsoft anymore. You are better off betting on Java, LAMP stack, web services and such.

  4. barmijo

    I had the good fortune to be a supplier to Apple in the very early days and meet with Steve numerous times. He’s an extraordinary individual who’s never satisfied with how things have been done – all he cares about is what’s the right way. That focus doesn’t always yield market success, as the Newton illustrates, but when it does it creates a cult like following.

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