This Bloomberg story about the Zune hardware being discontinued by Microsoft contains an interesting statement. First off, if you haven’t read it, the claim is that there will not be a new hardware iteration of Zune from Microsoft. Why? “Microsoft will concentrate on putting Zune software onto mobile phones, such as those running its Windows operating system, said the person, who declined to be identified because the decision hasn’t been announced.” Did you read that carefully? Currently there is only one mobile phone OS that is Zune compatible and that’s Windows Phone, of course. But if it’s accurate that Zune software will spread to other mobile phones then that’s a pretty big deal. For Android, it brings a huge market with Zune pass, movies, etc to their platform. For iPhone, it would fight them on home turf and let people experience Zune software (PC) and phone, and try to gain a music market share it was unable to do with just hardware. This is potentially a gateway drug to experience the rest of what Windows Phones offer, just as the iPods worked to hook people into the iOS interface.
While we’re at it, in a pretty timely quote, Ballmer was noted as talking about Zune four years ago and stating that they were going to overtake Apple and another MS exec stated that there were hundreds of millions of dollars being thrown at Zune so it can compete…Man you can replace Zune with Windows Phone until you’re sick to your stomach.