Zune sales drop by 54%, down $100 million from last year

Sat, Jan 24, 2009

Analysis, Finance, News

All is not well over in Redmond.  Fresh off the news that Microsoft would be laying off 5,000 employees, Engadget dug up an interesting tidbit in Microsofts quarterly filing that sheds some light on everyone’s favorite brown MP3 player.  According to figures released by Microsoft, revenue from Zune sales decreased by $100 million from the same quarter a year-ago, slipping from $185 million in 2007 to $85 million in 2008 – a 54% decline.

It seems clear, and has been for quite some time, that Apple’s dominance in the MP3-player market is not going to subside.  An iPod Killer is about as relevant these days as an HD-DVD player – they both ain’t happenin’.  A new fight for digital dominance, however, is taking place in the emerging smartphone market, and companies like Microsoft would be well-advised to devote resources towards that battle instead of towards devices like the Zune.  The MP3 war is over.  It’s done – and has been for a while now.


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