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Gartenberg: Don't Misunderestimate Zune

If you understand that Microsoft is still a software company at heart and look where the Windows Mobile group sits in the org, you’ll have a pretty good idea of what the Zune/Phone strategy is. (if you still don’t get it, give me a call and I’ll walk you through it.) I’ve seen the next version of Windows Mobile and the version after that as well and I can tell you that they are very compelling stories for mobile devices going forward. If Microsoft can execute a proper marketing message around these devices with a legitimate Zune story, Microsoft will have the chance to be more than just a player amongst many in the mobile arena.

Sure the first iteration of Zune isn’t anything to email home about but then again, so were the first three versions of Windows and we all know how that story turned out in the end. Right?

Mebbe yes, mebbe no. As Joey's recent post pointed out, Microsoft has a tendency to stumble when it hits competition, so all the "ifs" around execution and marketing message are actually pretty big risks, given the cutthroat competition in the mobile business.

On the other hand, as Gartenberg points out in his quote (above), Microsoft's also got deep pockets. When they're in it for the long haul, they're willing to bleed red ink as long as their Windows and Office franchises keep on gushing cash. Microsoft's willing to lose money with every Zune player they ship for quite a while, if it means a successful defense against Apple in the digital home.

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