The Zune Sales Trend Disaster at Simon’s Blog

The Zune Sales Trend Disaster

Now that Zune has been on the market for a couple of weeks, it seems a good time to review where we stand in terms of the sales trends for the new Microsoft music player. Microsoft’s view, apparently, is that Zune sales are, “Exactly where they hoped they’d be.” But where is that, exactly? And, “All signs indicate that we (Microsoft) are on track to meet our internal business projections.” So, what are the trends in Zune product sales?

In order to look at the sales trends, I’ve chosen to use information from Amazon.com’s sales figures, as provided by their Electronics Best Sellers Chart. Now, obviously, Amazon is just one retailer; but they’re a pretty big one. And, importantly, the Amazon figures are a reflection of actual product sales (as opposed to product shipment figures that manufacturers often use to mask poor product sales).

The sales rankings over the last ten days for all three Zunes (black, brown and white) and a 30GB iPod, are shown in the graph below:

Zune sales

The graph suggest that sales for all three Zunes have been falling at constant rates since launch, with sales of the brown and white Zunes dropping off particularly dramatically. Note that all three Zunes appear to be performing badly in the market - the massive drop in rankings of the white and brown Zunes mean the scale of the graph compresses the significant downward trend in sales of the black Zune.

If these sales trends are correct, I simply cannot understand how Zune’s sales can be anything close to where Microsoft hoped they’d be. To me, this looks like a disastrous launch.

(UPDATE: in the last day or so, the Zune sales rankings of the black Zune and brown Zune on Amazon.com appear to have been improving. As of now, the chart positions are: Black Zune #57; Brown Zune #253; White Zune #664. It will be interesting to see if this is turns out to be a reversal of the downward sales trend.)

Trackbacks & Pings

Life Outside PLT1 » Fear and Loathing in Redmond. on 06 Feb 2008 at 4:03 am

[...] within the next three months: worse still, i cant find any current sales figures, but heres some biased ones anyway), and the 44.6G USD offer on Yahoo! (that hasnt yet gone through). They did do well with the Xbox [...]

Comments

Mike wrote:

Might want to make a graph that has just Black Zune and 30 GB iPod on it - the current graph (as you note) really doesn’t show just how horribly Zune is doing.

Also, a couple things to note:

(1) Amazon as a data source is actually biased against Apple since a very large fraction of iPods are sold directly through the Apple Store rather than through traditional retailers like Amazon. Zune does not sell direct to consumers, so in terms of levels (but not trends) the Amazon data will tend to make the iPod look worse and the Zune look better.

(2) The funniest/saddest part about Zune is not that it is failing to compete effectively against the iPod (no big surprise), but that it is failing to even compete effectively against other failed WMA-based players. For example, the Zune falls over 60 places behind the 30 GB Zen Vision M (manufactured by the soon-to-be-bankrupt Creative Labs). Many analysts predicted that Zune would steal more share from PlaysForSure players than from iPods, but Microsoft execs clearly hoped otherwise. Well, it turns out their hopes are being realized: specifically, not only is Zune failing to take market share from iPod, but it’s failing to even take market share from the PlaysForSure ecosystem!

If it weren’t for the fact that the Vista/Office 2007 cashcows are being released next year, I’d unload all the rest of the MSFT stock I own right now. Ballmer and company are idiots - if they can’t think of anything smart to do (and clearly they can’t), then they should return the profits to the shareholders, not flush them down the toilet in this ridiculous Zune venture.

Posted 29 Nov 2006 at 12:33 am ¶
simon wrote:

Interesting points, Mike. Thank you. As for the graph, what I’d really like to know is at what ranking in the Amazon chart do absolutely numbers of product sales become insignificant.

As it is, all we can see that Zune sales appear to be falling at a steady rate; but, it still might be that many players are actually being sold in absolute terms.

Posted 29 Nov 2006 at 1:07 am ¶
ConradGempf wrote:

I agree that it’s misleading FOR US that companies use “shipping” figures rather than actual retail sales numbers. It isn’t JUST a public relations thing, though. Microsoft may not be trying to hide anything. Microsoft simply doesn’t care about the end user. They get their money from shops buying it in. If they sell out of their stock to retailers but no one buys it from the retailers, in one sense, they don’t care (unless they’ve made some provision for allowing full price returns). Any other manufacturer would have to worry that a failure would mean the retailers won’t do business with them again. But this is where Zune is SUCCEEDING beyond MS’s wildest hopes. Every review that pans the Zune also says ‘don’t count them out’ and that their next version or the one after that is the one to watch for.

Posted 29 Nov 2006 at 1:49 pm ¶

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