Would Zune boon leave rivals in lurch?
Microsoft to spend 'hundreds of millions' on music players, software
For several years, Microsoft's digital music strategy has been to license its Windows Media software to a broad array of manufacturers (such as Dell, Creative and iRiver), musicstores (Napster, Rhapsody and Yahoo) and videostores (like CinemaNow).
While some have done pretty well, none has made a real dent in the dominance of Apple's iTunes and iPod.
Putting its vast development and financial resources behind Zune -- company reportedly told analysts it will spends "hundreds of millions" in the next few years -- should give the tech giant a good shot at challenging Apple.
But that could leave licensees in the lurch. While Microsoft will continue to support them, the iRivers and Napsters of the world will soon find themselves facing not one, but two corporate behemoths.
Windows Media devices may still work with the Zune store, and musicstore may work with Zune devices, but in both cases the licensees will have to overcome Microsoft's efforts to brand Zune as the alternative to iPod/iTunes.
The only scenario they may be left with is to differentiate themselves. Napster and Rhapsody, for instance, have been emphasizing the benefit of monthly music subscriptions over pay-per-download. Yahoo has publicly called on labels to let it sell music without anti-piracy restrictions, in which case it could sell MP3 files, which would play on both an iPod and Zune.
