Zune vs. iPod: 2006's Goliath vs. Goliath

Much like a social network, the recently launched Microsoft Zune needs active users to reach its potential. Unfortunately for the Zune, these users have to be physically close in order to connect. As a result, Zune’s biggest competitive advantage (wireless music sharing) relies on mainstream adoption in order to be an advantage at all. So how is Microsoft’s newest product playing out?

Looking at online retail demand, the Zune was off to a respectable start, but is now struggling. The chart above shows the number of shoppers at top online retailers for the Zune, iPod Nano and iPod Video on a weekly basis.

    "¢ In the week of its launch (Nov. 14th), traffic to Zune product pages surged 266% bringing Zune demand close to that of its most direct competition, the iPod Video.
    "¢ Both iPod offerings saw an explosion in demand as holiday shoppers started to ramp up their holiday spending (Nov. 18 — Nov. 25).
    "¢ Since the Thanksgiving weekend Zune demand has held steady, but continues to trail the Ipod Nano by a factor of 4x and the iPod Video by a factor of 2.5x.

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