There are two biggest IT companies in the world, which are Microsoft and Apple. It seems that competition between these companies has lasted since they were created. Apparently, Apple has become more and more popular, and it seems that Microsoft is losing the competition. One of the brightest examples of a project that failed as a result of such competition is Microsoft Zune, which was launched in 2006. The main ideas of this project were to make the player as well as an online music marketplace that could compete with iTunes. However, this project totally failed, which caused Microsoft huge financial and reputation losses.
One of the biggest problems of the Zune project is its low quality. While Microsoft had access to almost unlimited resources, the scope of the project was rather large while time was running out. It should be noted that iPods have been produced by Apple since 2001, and more than 100 million iPods were sold by the time when Zune was launched. Microsoft positioned this device as the main competitor to iPod, and Zune Store was positioned as an alternative to iTunes. Lack of time and huge ambitions resulted in a rather poor quality of Zune player, and the design of the Zune store, as well as its payment system, were far from perfect.
The main stakeholder of this project was Microsoft. The player itself, as well as its software and Zune store, were developed by Microsoft. Though Microsoft had a huge of experience developing an operational system for PCs, it had no experience in developing high-quality software for mobile devices. Moreover, even now, phones with Windows Mobile are quite unpopular and have lost the competition to smartphones with iOS and Android. It can be claimed that the failure of Zune resulted in Microsoft’s failure to successfully enter the market of mobile devices.
There are numerous reasons why Microsoft Zune failed. Firstly, the credit system for buying music was very inconvenient. Users had to buy Zune points, and only then could they purchase songs for these points. Secondly, there were no companies that created various accessories for Zune. There are hundreds of companies creating accessories for Apple devices; however, in the case of Zune, only Microsoft created accessories. Thirdly, the price for Zune players was almost the same as Apple iPods. While Microsoft couldn’t provide high quality and great design, prices for Zune players were unjustifiably high. Finally, one of the major reasons is that Apple is a rather strong competitor, and they are very innovative. When Zune entered the market, iPods had already existed for five years, and Apple was constantly improving them.
The main criteria to define the failure are the popularity of the Zune project among consumers, the losses that Microsoft has, and the support of current Zune users. It is impossible to deny that the popularity of Zune players is rather low, and Apple has won the competition. The losses caused by the Zune project are about $289 million, which are huge losses even for Microsoft. Thirdly, Microsoft stopped supporting Zune users and providing Zune services in 2015. Hence, this project was an absolute failure.
Microsoft made too many mistakes that could have been avoided to make this project successful. Firstly, Microsoft should have reduced the price of their devices because their quality was lower compared to the quality of iPods. Secondly, they should have entered this market much earlier because allowing Apple to dominate the market for about five years is not the best idea. Finally, they should have created something innovative instead of just making a bad copy of iPod and iTunes.