September 19, 2006

The capability most central to the overall Zune vision is its wireless capabilities. Microsoft's goal is to change how music is shared and discovered. The goal is to build a community of music fans, and the community will be built by the wireless Zune.

The Zune device will be able to locate other Zune devices nearby (across an area of a large room, for example) and send to that device music files, video files and/or pictures. The destination Zune shows a pop-up window that asks if you'd like to accept or reject the files. Once accepted, the files are transfered. A typical music file will take four seconds to transfer. A photos take significanly less time.

There are a couple points to the Zune that are important because consumers' acceptance of them is key to the Zune's success. One has to do with limits of music transferred. A song received from another Zune can be played three times over three days. On day four the files will not play. This goes for a song purchased at the Zune store or an MP3 ripped from a CD. Microsoft is sure to run into a vocal crowd that wants to share music on its terms, not on Microsoft's terms. People can currently share without restrictions on P2P networks and, more personally, via email and instant messenger. They may not be able to adjust to the idea of sharing a short-lived file.

Another -- and probably lesser issue -- is the communicative nature of the Zune. It doesn't broadcast, it connects with only one device at a time.

(Another key issue is price. Microsoft has not revealed pricing details, but Engadget offers this post about a Wal-Mart website that leaked a Zune price of $284.)

Any reader of Malcom Gladwell is familiar with the concept of the tipping point. For the Zune to achieve its potential and achieve its goal of enabling music sharing, it has to sell enough Zune devices to reach its tipping point. The real value of the Zune is determined by the network effect. As more people own Zunes, each Zune becomes more valuable. What is the Zune's tipping point? That's very difficult to answer. It's anybody's guess. Short of the tipping point, Zune frustration could set in. Zune owners could become frustrated that they have nobody to share files with. Imagine spending a few hundred dollars (or whatever the price will be) for the Zune party and nobody showed up?

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Posted by Glenn at 10:15 AM | | | Zune