Some thoughts on Zune 2.0

So I wrote up a pretty thorough update on the new Zune devices last night but I'd like to chime in with some off-the-cuff thoughts this morning that are based solely on a single Microsoft briefing and some press packet photographs.

I like what they're doing. As a reviewer, I feel like I'm often put in a position of complaining about things, and certainly, I can find issues with Zune 2.0, as I call it. But Microsoft is moving in a positive direction here. The new devices look nice. The new software can only be an improvement, and I like that the Media Center guys were involved. Ditto on the new online service.

Pure MP3s rock. It's that simple. Microsoft has immediately obsoleted Apple's non-DRM AAC tracks. Dead and buried.

Podcast support. It's nice and it's overdue. But as a reader pointed out this morning, the best part of this is that Microsoft's isn't doing something lame like calling them netcasts. They're podcasts. Name be damned.

International support? Not this holiday season, sorry. Microsoft has plans of course. They're not talking.

Transcoding stinks. I don't like having two copies of the same movies and TV shows on my system, and it takes a long time. In the case of recorded TV shows from Media Center, obviously, those ginormous files need to be translated into something more manageable, so that makes sense. But my understanding is that Zune 2.0 devices will natively playing 640 x 480 video (and below) without requiring transcoding, as does the iPod. This is a huge improvement over the previous generation Zune. (Which, BTW, I don't believe will ever support 640 x 480 video playback, even after the 2.0 firmware update.)

TV shows and movies. While I sort of get that Microsoft wants to do its own thing with the Zune, allowing the device to work with Amazon Unbox movies and other PlaysForSure (or whatever they're calling it this month) content would be huge. Access to a huge library of TV shows (and a decent library of movies) is a big advantage for the iPod. The Zune 80, in particular, is crying out for video. Speaking of which, Microsoft need a pure video device like the iPod touch. While they'll never make, of course, until they're selling a decent collection of video content and the market proves that such a device is viable. I want one.

Pricing. Microsoft is meeting Apple's prices across the board. Not good. Since the company is taking a bath on these devices anyway, Microsoft should undercut Apple. The Zune 4 and 8 should be at least $25 less than the nanos, and the Zune 80 should be $50 less. I know, it's crazy. But this is market share building time.

Community. As a crotchety old guy, the community stuff, and MySpace and Facebook integration, doesn't really speak to me. But then I'm not exactly the target market, and I have to applaud Microsoft's attempts at making it easier for users to discover new music. This is something Apple has utterly failed at: As successful as the iTunes Store is, finding new music there is almost impossible.

The anti-Apple contingent. In a very strange way, Microsoft is now in a position to take advantage of anti-Apple sentiments that are suddenly very prevalent throughout the content industries (music, TV, movies) and with consumers. I guess when companies get to a certain point size- or success-wise, there is a natural backlash. Microsoft experienced this with Windows (and to a lesser degree with Office), and now Apple is experiencing it with its iPod/iTunes/iPhone products. You never saw this kind of issue when Apple's most ardent fans made up a significant part of the user base. That's not the case anymore, and Apple hasn't handled it well at all. The question, of course, is whether Microsoft can make the Zune as successful in digital media as, say, the Mac is in the PC market. That's about 2.5 percent market share worldwide (tough to do when you only sell in North America as with the Zune) and 5 percent in the US. That figure is not just doable, it should be considered the first step. Though NPD says that the Zune has typically garnered about 10 percent of the market for HD-based players, my calculations suggest that Zune is running at about 3.5 percent of the total MP3 player market. (Is this accurate?) They need to do much better than that.

OK, I gotta head to the gym and ruminate over this stuff a bit more.