12-08-2006, 05:00 AM
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Contributing Editor Emeritus
Join Date: Aug 2006
Posts: 1,097
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Zune Drops to Fifth, MS Says That's OK
"Microsoft Corp.'s Zune device dropped to fifth place from second in the U.S. market for digital media players in its second week in stores, market researcher NPD Group Inc. said. Zune captured 2.1 percent of the market in the week ended Nov. 25, said Stephen Baker, an analyst at Port Washington, New York-based NPD, in an interview today. Baker said Apple Computer Inc.'s iPod remained the leader, with 39.4 percent that week, based on units sold. Zune's market share declined as SanDisk Corp. boosted sales with a 50 percent price cut on its media players, taking a 39.3 percent share and knocking Microsoft from the No. 2 spot it occupied in its first week in the market. Redmond, Washington- based Microsoft sold about the same number of units as the previous week, failing to keep pace with rising holiday sales."
OK, 2.1 percent doesn't sound that great, but remember Microsoft has a plan, as stated in a report released yesterday:
""While this is expected, our focus is less on week over week numbers, and more on the incremental sales that are leading to overall growth of the category," said a Microsoft spokeswoman in a statement. .. Microsoft has said it plans to invest hundreds of millions of dollars to develop and market the Zune, while acknowledging that the investment may take years to bear fruit."
Microsoft's in it for the long haul and they, more than anyone, have the resources to bide their time.
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