Fortune magazine writes that even as Microsoft rolls out the Zune 3.0, Steve Jobs still isn’t losing any sleep over it. The new models aren’t bad (although they’re quite similar to the last generation; all of the updates are minor, and mostly contained within the software, aside from price and color changes).
“It’s a very uphill battle for Microsoft,” said James McQuivey, vice president of Forrester Research, in the article. “The iPod just has so much momentum. It’s really hard to break that momentum when your most desired customer is someone who already owns one.”
Microsoft seems content with its very small market share for now, saying on record that they’re happy with the Zune’s sales performance to date. But McQuivey speculates in the article: what if Microsoft negotiated to make the Zune the preferred music player for the MySpace Music-Amazon music venture? “But that would never happen,” he says. “The iPod sells like crazy on Amazon… it has to be frustrating if you are working on the Zune team.”