Zune Survives 2008, Might See 2010

After watching their Q4 revenue drop a staggering $100 Million compared to the same quarter last year, Microsoft’s Zune team had to have an uneasy feeling when the announcement of layoffs came last week.  While the Entertainment and Devices Division remained quite profitable, the Zune fell squarely on its face.

Things however are not all doom and gloom.  The hardware is very solid and their Zune software is, in my honest opinion, far superior to iTunes in almost every way.  With that in mind, Zune can’t die, can it?  According to Adam Sohn, Microsoft’s director of Zune marketing, updated Zune hardware and software is still on track and they are planning to deliver “progress” in this calendar year… whatever that means.

Having owned offerings from both Apple and Microsoft, I have to admit that I prefer the Zune.  Its interface is on a level above that of the iPod and the software is polished to near perfection.  Microsoft will never overtake Apple in sales, but they can hit back on an innovative level like they have been so far.  As much as I like the Zune, how long can Microsoft continue to hemorrhage money for the device?

“Every time anything comes up, there is a set of people who pull a Chicken Little and say, ‘The Sky is Falling. Zune is dead,’ ” he said. “The fact is we are on track to deliver the next generation of Zune innovation in software and hardware.”

“The planning is fast and furious,” he said. “We will deliver progress this calendar year.”