Microsoft needs to launch a Zune HD2 now more than ever

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In a many peoples eyes, the Zune HD has been a catastrophic failure as a challenger to the venerable iPod touch. The Zune’s less than optimal success have been mainly due to Microsoft’s miscues, from bad marketing decisions, lack of hardware features, zero international availability and a stupid decision not to allow access to the marketplace and SDK for third party developers.

The undeniable importance of such a device was brought home when I had a discussion with a teenage relative over the Christmas weekend. She is saving money to get an iPod touch and I have been trying my best to convince her to get a Zune HD. Actually, there was a caveat, I told her to wait a month and see if MS comes up with improved hardware running the WP7 OS minus the phone. Otherwise the iPod touch was the better option. You see, most of her close friends already have or just got one over Christmas, so they were planning to make facetime calls and use the textplus app (they are teens after all and she is on a limited text plan)

My exhortations on the superiority of the Zune client and Zune pass fell on deaf ears in the face of Apple’s ecosystem with countless apps, “everyone has an iPod” perception and honestly, a more fully featured hardware spec than the Zune HD. I think these sentiments  extend to other demographics other than teens to people who would like smartphone “like” devices, without a smartphone plan. Most savvy consumers know that the average $1800  contract cost is the TCO as opposed to the initial purchase price.

These devices also act as perfect gateway to getting user comfortable with using a new platform other than Microsoft, like Apple has done with the iPod and iPad. Some Android manufactures, Samsung in this case, seem to have realized this with the expected launch of the Samsung Galaxy player, an Android 2.2 device minus the phone. The Zune HD2 should have all the latest hardware features that are comparable if not better than their rivals which would include dual cameras, gyroscope, NFC chip, GPS, compass  just to name a few. It would double as a reference point for OEMs who have done a lackluster job with the current crop of WP7 hardware. Paul Thurrott has an excellent titled “ Top Tech Company 2010: Apple” that includes this poignant excerpt

Best of all for Apple, its products are all aspirational. While few consumers in the United States can actually afford a Mac—with an average starting price of $1,265, almost three times the cost of an average PC—many can afford iPods, and many are buying expensive iPhones and iPads whether they can afford them or not. The good experiences these people have with Apple’s gateway products will lead many to consider a Mac the next time their PC needs to be replaced. And that, too, will happen whether they can afford it or not.

The coming year portends to be a make or break period for Microsoft in the consumer space. They have watched their lead erode to their competitors even though they posses very capable products. It is now time for them to leverage the power of the Xbox + Kinect, Windows Media Center, Zune Player, Windows Phone 7, a slate/tablet (Not running full Windows 7) and Windows Home Server (If they can fix the drive extender boondoggle) and make these products work seamlessly together. The glacial pace of updates may work in the enterprise but not with consumers. It is time for them to speed up the process with a regular cadence of new features and fixes as they become available, instead of waiting for a huge one ever so often. Apple does a very good job with the yearly refresh to their hardware that are predictable and constant bug fix and feature updates which give their users something to always look forward to.

A Zune HD2 may seem insignificant, but I whole heartedly believe it is a crucial component in Microsoft’s efforts to win back the consumer mindshare, and especially the increased adoption of Windows Phone 7. Microsoft needs to hurry an tie up the  loose ends in their consumer products that manifest in ways like updating their competitions  apps ahead of their own in the case of Bing and Windows Live Messenger, the inability to read  NTFS formatted files or lack of a browser and a marketplace for 3rd party apps on the Xbox, the lack of a native Windows Media Center, Xbox or PowerPoint remote on Windows Phone 7  just to name a few. I have no idea why Microsoft has localization problems considering that Windows Mobile and Windows 7 already support languages currently unavailable on WP7. The announcement for a cohesive strategy needs to be done now, hopefully at CES and with actual products ready to ship by latest the first half of next year. With the possibility of a two year wait for a credible iPad challenger like some of the rumors have reported, or zero information on the Zune HD2, Microsoft might as well pack it in. CES 2011, here we come!

The video below shows the Samsung Galaxy 50 player. Update: It is smaller than the yet to be launched 4 inch screen Samsung Galaxy player, but it gives you an idea how the new device will work. I can’t help but imagine the more polished WP7 OS running on this device.

More about the topics: ipod touch, samsung galaxy player, Zune HD2