All Things Digital

A “regularly scheduled maintenance” outage will take Microsoft’s Zune platform offline for up to 48 hours beginning today. So if you’re among the five Zune owners who comprise the “Social” and you’ve actually noticed that it’s suddenly gone missing–along with Zune Marketplace and the Zune Net forums–and you’re bothered by their absence, this is why. Microsoft (MSFT) offered no explanation for the outage, just a brief apology: “We apologize for any inconvenience this might cause you. Please check back soon. We look forward to sharing our picks, plays and recommendations with you.”

Apparently, a Zune outage can exist without being perceived. …

How neatly Microsoft’s latest Zune promotion encapsulates the differences between its also-ran digital media player and Apple’s iPod. As promised, Microsoft today uncrated its next-generation Zune. Along with it, the company rolled out a Zune 3.0 firmware update that enables the device to download songs directly from the Zune Marketplace over Wi-Fi. And in homage to Apple’s iTunes Wi-Fi Music Store at Starbucks (SBUX), Microsoft announced a similar partnership.

With McDonald’s (MCD). (Did somebody say McDonald’s?)

Under the terms of the company’s deal with the fast-food chain, Zune owners will be given free Wi-Fi access in any of the restaurant’s locations that support it. So, Apple (AAPL) inks an exclusive partnership with an “upmarket” coffee retailer. Microsoft (MSFT) strikes deal with the Golden Arches.

Five bucks and a pound of StumpTown’s Hair Bender says the next episode in Microsoft’s new “Simple Life” ad campaign features Chairman Bill Gates and Jerry Seinfeld sharing Zune-to-Zune Squirts over Big Macs. …

Zune’s focus is liveliness and youth. The buzz of the sound “Z” makes it one of the most energetic in the language. Lexicon’s studies of sound symbolism, conducted with hundreds of people in a variety of languages, have shown that word-initial “Z” scores very high for communicating attributes like “lively,” “daring,” and “fast.” The letter Z’s current popularity in respellings like “boyz” and “antz” lends a youthful irreverence. Even though it isn’t obviously derived from any real word, Zune could pass for a casual abbreviation, in the same way that ‘zza stood in for pizza with some people 10 years or so ago. Zune is clearly a fun kind of name.

That’s how David Placek, founder and CEO of Lexicon Branding, explained the etymology of Zune when Microsoft (MSFT) debuted the device in 2006. Ironically, he neglected to mention that “Z” also denotes the sound of sleeping or snoring and was often used as an insult in Shakespearean English, which would, perhaps, have been more appropriate given the market’s reaction to the device and the size of its share of the market with respect to Apple’s (APPL) iPod.

And sadly that’s still true today, though Microsoft continues to work doggedly to imbue Zune with the “youthful irreverence” to which Placek referred (although “irrelevance” is perhaps a better word here). Consider the third-generation Zune feature set Microsoft confirmed Monday evening: storage capacity of up to 120 gigabytes, wireless connectivity to the Zune Marketplace from any public Wi-Fi hotspot, and “Buy from FM,” a feature that allows Zune owners to identify and purchase songs they hear on the device’s FM radio. Those are nice enhancements. And while they’re sure to make Zune 3.0 more successful than its predecessors, it’s hard to see them helping Zune steal mindshare from the iPod, which controls about 71 percent of the digital media player market to Zune’s 4 percent, according to NPD Group.

The new blue-on-silver color scheme is a nice improvement over the UPS-brown/guano-green color palette to which we’ve become accustomed.

Since John Paczkowski is still out of range, Beth Callaghan will post Digital Daily today.

Reuters/Hollywood Reporter reports that Microsoft execs have been talking to talent agencies all over Hollywood with the intention of building an exclusive body of original content for the company’s Zune player. Not just standard sitcom fare, either–Zune’s recent update of firmware for the device provides better social functionality, and Microsoft (MSFT) sees this as a move toward the kind of communal functionality pioneered by the XBox multiplayer experience.

Richard Winn, director of entertainment development for Zune, says, “What we would be looking to do with any form of original content is the added component that Zune could provide that iTunes or any competing service couldn’t.”

Great, but will that make a difference, with the Zune market share hovering at 4 percent (compared to Apple at 71 percent)? Probably not. This is the same programming/marketing team, after all, that came up with the idea of launching a Joy Division version of the Zune. Really–Zune users are already lonely; no need to make them sad.

Well, it’s also the team that does the impossible–defying all rumors of extinction and plugging away on a platform no one uses. Maybe while the Zune team is making the rounds, they’ll find out who represents U2.

It’s interesting the iPod has been out for three years and it’s only this past year it’s become a raging success. Well, those things that become fads rage, and then they drop off. When I was growing up there was a product made by Sony called the Sony Walkman–a rage, everyone had to have one. Well, you don’t hear about the Walkman anymore. I believe that one-product wonders come and go. You have to have sustainable business models, sustainable strategy.”

– In 2005, former Dell Chief Executive Kevin Rollins utters the words he would dine on a short while later

A glutton for punishment, Dell. Though its foray into the MP3 player market was about as ill-starred as they come (remember DJ Ditty (mascot at right)? Yeah, didn’t think so.), the company is gearing up for a second attempt. Unfazed by its Ditty disaster, Dell (DELL) has reportedly developed a second, ahem, “iPod killer.” Designed to connect to online music services via a Wi-Fi Internet connection, the device will use software developed at Zing, a company Dell acquired last year, to retrieve and organize digital media. The device will sell for less than $100 when it arrives at market in September.

Dell’s first MP3 player lasted three years before the company scuttled it. That was back in 2006, when Apple’s iPod was somewhat less ubiquitous than it is now. How long will its second player last in a market that’s 71 percent-controlled by Apple (AAPL) and dripping in iPod branding? History would seem to suggest not long at all, though Microsoft’s (MSFT) maligned Zune music player has managed to stick around for a few years. Perhaps Dell can steal a point or two of market share from its sad, little four percent. All aboard the FAIL-boat. …

What a sad, sad day for Microsoft (MSFT). Zune Guy, the lone evangelist/fetishist for Redmond’s maligned digital media player, is giving up the fight. Dismayed over the Zune’s lack of improvement “mszunefan,” a.k.a. Steve Smith, has decided to have his Zune tattoos covered. “I am done,” Smith wrote in a post to Zune Scene. “I have had the Zune since Day 1 and have noticed little improvement. I have tried my best to support them every step of the way but the recent Xbox Live announcement at E3 made me lose it. To not include Zune Marketplace or the ability to load videos from Xbox Live to your Zune made me finally give up. I am in the works of figuring the best way to get a new tattoo to cover the [Zune] logo on my arm. … Good news is I will still buy Zunes, but I might try out some of the competition before the Zune 3 comes out. I do dig all the people who supported my journey–all four of you.”

Was he inebriated? Do you even know anyone who owns a Zune?”

–-Apple CEO Steve Jobs

Apparently not. And, perhaps, you never will.

GameStop (GME) has stopped selling Zunes. During a quarterly earnings call yesterday, Gamestop CFO David Carlson said the retailer had pulled Microsoft’s (MSFT) media player from the shelves of all 4,400 of its stores. He offered no further details on the move, but according to a GameStop spokesperson, it was inspired by insufficient demand. “We have decided to exit the Zune category because it just did not have the appeal we had anticipated,” the spokesperson told TheStreet.com. “It (also) did not fit with our product mix.”

Your product mix and everyone else’s as well. As mentioned here last week, just 2 million Zunes have been sold since the device’s launch in November 2006. To put that figure in perspective, Apple (AAPL) sold 10.6 million iPods in its last quarter alone.

And so a question: Is GameStop’s decision to dump the Zune the beginning of a wider trend? According to Microsoft, the answer to that question is ‘no.’ “We have a set of great retail partnerships that give Zune a strong presence at retail including Best Buy (NYSE: BBY), Target, Wal-Mart, and others,” Adam Sohn, director of marketing for the Zune, said. “We will continue to invest in deep retail partnerships, and have seen good momentum online and at retail over the last few months including a great response to our recent spring update.”

Was he inebriated? Do you even know anyone who owns a Zune?”

–-Apple CEO Steve Jobs on Microsoft’s claim that the Zune is now a worthy alternative to the iPod.

Despite its feature differentiations and, er, “distinctive” color palette, Microsoft’s (MSFT) Zune has yet to prove itself the iPod killer it was once touted as. Since its launch in November of 2006, the Zune has sold 2 million units. In comparison, Apple (AAPL) in its last quarter sold 10.6 million iPods–quintuple Microsoft’s cumulative sales to date. Zune’s market share in this space during the first quarter: 4%. Apple’s share: 71%.

Clearly, the only thing being killed by Microsoft’s iPod killer are Microsoft’s chances for unseating Apple in a market that would seem–according to relatively flat year-over-year iPod sales–to have peaked without it.

Apple introduced a new version of its eight gigabyte iPod nano digital media player this morning. And it’s pink, which according to Apple is among the iPod’s “much-requested” colors (noticeably absent from that list: the “National Park Bench Brown” shade pioneered by Microsoft’s Zune team.)

“Customers are going to love the gorgeous new pink iPod nano,” Greg Joswiak, Apple’s vice president of Worldwide iPod Product Marketing, enthused in a gushy press release. “The pink iPod nano is perfect for people who want a great new color this spring, or who are searching for a special Valentine’s Day gift.”