November 3, 2006

Micosoft says no plan to release Zune out of US

Microsoft says it has no firm plans to launch the 'iPod killer' Zune digital media player anywhere outside of the US following its official release later this month.

Zune will go head-to-head with Apple's iPod when it goes on sale in the US from 14 November, and reports this week claimed the device would not hit the UK until late 2007 or early 2008.

But in an interview with new Microsoft UK MD Gordon Frazer said there are currently no plans for a UK or global release for Zune.

He said: "At this stage we have no firm plans to launch anywhere else globally. Does this mean we'll launch in the UK? I can't tell you when [it will launch] for sure and I can't even necessarily tell you if. We're going to see how this goes in the US and what lessons we learn and see if we get that right, and then make the right decision for the UK. But right now that decision hasn't been made so the launch will only be in the US."

Frazer acknowledged the current dominance of Apple's iPod - which analysts predict will continue for at least another 18 months - but said there are gaps for Microsoft to exploit.

He said: "Today certainly Apple is the market leader, I don't think anybody is questioning that and they are out ahead in a lot of ways. They deserve the credit they get, they've built up a large installed base, they continue to be the market leader. But we think there are things that can be done better."

In particular he said the built-in wireless connectivity in Zune will allow people to transfer music and other downloads to each other's devices. In the case of music downloads this means a transferred track will be available temporarily, giving the user the chance to buy it or delete it.

Frazer said: "One of the big trends, broadly, not just in music, is around social networking and the ability for people to exchange and share information, ideas, music and experiences."

But Frazer wouldn't be drawn on whether Microsoft thinks the Zune will be the 'iPod-killer' it has been touted as.

"It's a new business for us and we're enthusiastic about it. We'll see where it goes," he said.

Read the full interview with Microsoft's Frazer tomorrow, in which he talks about why search, energy consumption and security are compelling reasons for businesses to upgrade to Vista, the ongoing battle against software piracy, and whether the Linux desktop argument is dead.