New Microsoft Zune - Great, But...

Oct. 5.07 | About: Microsoft Corporation (MSFT)

When I was on CNBC's Power Lunch interviewing the president of Microsoft's (NASDAQ:MSFT) entertainment division earlier today about the rollout of the latest Zune, the only thing I could think of asking him was the obvious: No matter how good the product is, why would anybody go through the hassle of switching if they're locked into iTunes?

He came back with an answer that there are ways people can migrate if they want and, besides, there are still plenty of people who aren't yet in the market. So, I followed up: Does that mean the main market is people new to the market? I mean -- doesn't everybody who will have some sort of MP3 player already have one?

He replied that Microsoft believes there's a big replacement market. Maybe there is, but for better or worse -- unless iTunes becomes a free platform, or unless you want to go through the hassle of using some dubious software (not to mention the hassle) to migrate everything from one platform to the other -- all of the new Zunes in the world won't help Microsoft (or anybody) be any more than a niche player in the space.

Period, end of story.