Microsoft is ready to spend hundreds of millions of dollars over several years on its Zune products to catch up with the iPod. According to CNET News, Microsoft sees its music player and download service as a long-term investment.
Robbie Bach, Microsoft’s president of the Entertainment and Devices Division, said “We think of this in the hundreds of millions of dollars of investment. It is something that is going to take time. This is not a six-month initiative.”
The company says it isn’t abandoning its PlaysForSure program, either. Microsoft plans to continue supporting the music player licensing program that many of its partners have joined.
Zune, Mr. Bach says, is designed to be a new product group that isn’t going to be along the same lines as the devices Microsoft’s PlaysForSure partners are producing. Instead, it is designed to tie in with other Microsoft products, like the Xbox, Media Center, and Live Anywhere gaming service.
The fact that Microsoft is entering the media player market, however, isn’t good news for those PlaysForSure partners, despite the company’s commitment of continued support. Zune will be clearly positioned in competition with products from companies like Creative and iriver, and will likely erode their sales before impacting the iPod.
In the long run, Microsoft may be able to chip away at the iPod+iTunes marketshare, but not before it hurts the other music players and services on the market.