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Zune decline heads to ‘zero’ market share

'iPod killer' status fades rapidly

Microsoft's iPod rival Zune MP3 player is suffering from a marked decline in sales and market share.

According to Microsoft's latest 10-Q financial report, "Zune platform revenue decreased $100 million or 54 percent reflecting a decrease in device sales."

Microsoft Zune 80

The Wall Street Journal estimates that these figures imply Zune revenue dropped from $185 million during Christmas 2007 to just $85 million in the 2008 Christmas quarter.

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This compares badly with the 22,727,000 iPods Apple shipped during its latest quarter - a three percent unit growth over the year-ago quarter. Apple's iPod generated $3.37 billion in revenue over the Christmas quarter, but this was a 16 percent decline in iPod revenue - suggesting a consumer shift to less expensive iPods and cannibalization of iPod sales by the iPhone.

The Wall Street Journal predicts that "at its much faster rate of decline, the Zune player looks like it's headed from low to no market share".


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