Simon’s Blog

Microsoft said it would be happy if it sold a million Zunes in a year six months. Depending on how you count “sales”, they might have just achieved their target. At the time this objective was set, the Zune team was staunch in its own defence. This is a new product - they cried - You have to build up to big sales, over say “ten years”. Well, guess what? Never mind six months: it’s looking like Apple might sell a million units of its new product - iPhone - in the first week of release.

More than that, it now seems possible that within the next two years, iPhone sales will outstrip sales of Windows Mobile devices, which are much higher volume devices than the Zune. Quite what Steve Ballmer was talking about when he said recently that Microsoft was more interested in high volume hand-held sales than in the small niches that Apple goes after, I don’t know.

If Microsoft was on top of this space, they’d realize that it’s form factor that drives volume sales of mobile handsets in the developed world, not price. In other words, as long as the device is small enough, and you have enough cool features, you don’t have to sell it cheap. If you make a device that is perceived as a big clunky old brick, or even an ugly small brick, people won’t buy it at any price. Incredibly, though, Microsoft still doesn’t think iPhone is important - they’ve said publically that they’re carrying on regardless with their same old Windows Mobile strategy…

Expect Apple to make some kind of announcement when the magic one million sales figure has passed…