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November 01, 2006

ABI Research Reveals 58 Percent of iPod Users May Choose Zune

By Susan J. Campbell, TMCnet Contributing Editor

All of you die-hard iPod enthusiasts may be dejected to learn that research has shown that Microsoft Zune may be posing a bigger threat to Apple’s iPod than you are willing to realize or admit.

ABI Research has released the findings of a new study that reveal that many prospective MP3 player buyers – including current iPod owners – would be likely to choose Microsoft’s (News - Alert) Zune over Apple’s star product.

When 1,725 teenage and adult US residents were asked whether they planned to buy an MP3 player in the next 12 months, of those responding they were likely to do so, 58 percent revealed they were “somewhat likely” or “extremely likely” to choose a Microsoft Zune player over the iPod or another MP3 player brand.

This 58 percent that were likely to go the way of the Microsoft Zune – all identified themselves as existing iPod owners. The respondents owning other brands, 59 percent, were also “somewhat or extremely likely” to purchase the Microsoft Zune as opposed to another brand – including the iPod.

Steve Wilson, ABI Research (News - Alert) principal analyst, shared that the firm’s conclusion is that iPod users don’t display the same passionate loyalty to iPods that Macintosh users have historically shown for their Apple products. The survey revealed that only 15 percent of iPod owners said that they were “not very likely” or “not at all likely” to choose Zune.

With these survey results, the real question is whether or not Microsoft’s Zune will be able to draw the attention it needs to come anywhere close to iPod’s impressive sales record. ABI Research shared that it believes that a critical factor will be to what extent Microsoft can differentiate the Zune from competing products in some meaningful way.

Wilson noted that one differentiator, Zune’s Wi-Fi peer-to-peer sharing, which Microsoft is playing up heavily, isn’t really all that compelling, at least not right now. There is a lot more that could be done with that capability.

Considering the results of this survey from ABI Research, Apple will have to make some big announcements in the next year in order to maintain its competitive edge in the industry. Wilson advised that Apple should develop a new high-end device that works really well and looks really cool as other brands are catching up.

The data contained in the ABI Research report was a result of an October 2006 Web-based survey among a nationally-balanced and demographically-representative sample of 1,725 online consumers, age 18 and older. Respondents were provided a photo and description of the Microsoft Zune device before being asked about their likelihood to choose it over a competitive MP3 player. To more close examine the survey results, click here.

While Microsoft may still have some work to do to make its Zune the commercial success it is hoping for, the results of this survey are likely to cause waves in the industry. Apple cannot remain on its throne without making some changes as consumers will continue to demand more and the competition is not willing to take a “wait and see” approach. This ongoing saga will be one to follow closely to see how it plays out over the next year and who will end up coming out on top.


Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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