Thursday, July 06, 2006

When the Best of Intentions Isn’t Enough

The rumor mill is buzzing about Microsoft’s (unconfirmed) plans to launch its own portable audio and video player, probably in time for Christmas, along with an iTunes-like online store. The gist of the argument goes like this: Microsoft is unhappy that its hardware partners, including Creative Labs, iRiver and Samsung, have been unable to compete effectively against Apple’s iPods. So as not to let the portable digital media business slip away entirely, Microsoft’s solution is to launch its own portable audio/video media player to compete with the iPod, and its own digital media store to compete with iTunes.

The logic is that, like Apple, Microsoft can make a better product by tightly controlling the hardware, software and services. The problem, however, is that Microsoft already does that, and the results have been far from electric. Microsoft has launched many hardware platforms over the years, and they not only write the specifications for the hardware, they often actually provide a “reference design”—a working system—that is designed to be used as a model by hardware manufacturers. A few examples include the recent crop of tablet PCs, the Portable Media Center, and most recently, the Origami PC. The last two in particular were designed inside and out by Microsoft. None of them have made much of a dent on the market.

Having complete control of the platform is insufficient for taking on Apple, or for that matter, Sony in the Xbox/PlayStation 2 battle. The hardware, software and services not only have to work together, they have to be a step above the competition. So far, Microsoft is at best a parity player.

That doesn’t mean that I expect that Microsoft will fail if it goes ahead with its own player and store. Far from it. Apple’s strategy of locking down the iPod and iTunes with FairPlay, its proprietary DRM that it licenses to no one, is deeply frustrating. It prevents iPod users from seriously considering competitive products, and prevents users of competing players with large libraries of DRM-protected media from switching to Apple. I’d love to see Microsoft succeed with a platform that enables customers to choose players from a variety of manufacturers and media from a variety of stores. However, the intention to “out-Apple Apple” alone won’t cut it. To dislodge Apple, Microsoft will have to ship a product with a level of user-friendliness and refinement that’s an order of magnitude better than the company has ever done before.

Update: The rumors are correct, and Microsoft is readying its own media player/media store combination under the Zune brand name.

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