Each week Ross Rubin contributes Switched On, a column about the future of technology, multimedia, and digital entertainment:
With all the recent coverage surrounding Microsoft's rumored portable music player Zune, some may conclude that Engadget's editors have highly active and detailed imaginations and exceptional Photoshop skills that they employ without hesitation in the traditionally slow summer tech news months. Others, however, may be convinced that Microsoft is following through on Steve Jobs' prediction that the company will enter the market with its own branded player. The pictures of the Zune hardware show an attractive but not groundbreaking design, one that looks similar to a Gigabeat with a small wheel replacing its crosshairs, or a Sansa e200 with its wheel shrunk and a few extra buttons.
Much of the discussion around Zune has focused on the strategy shift it would mean for the software giant and the competition that it would bring to Microsoft's current hardware partners. But the company's continuous user interface refinement of Windows Mobile and expecially its deep pockets can let it fight the iPod in ways that its current partners simply can't. Microsoft could best leverage its war chest via player subsidization, accessories and advertising.
Regarding player subsidization, if the Xbox consoles have been any precedent, it's doubtful that Microsoft would lowball its player's pricing too much. The company would likely rather bring out a full-featured device that wins the hearts of early adopters. However, it could subsidize expensive advanced features that may be a bit ahead of the market. The rumored inclusion of WiFi would enable Microsoft to play upon one of the benefits of subscription services – legal peer-to-peer music sharing among devices of licensed content -- and allow a tighter level of integration with the Xbox 360. This could also drive a viral marketing effect. Indeed, Microsoft, more than any of its hardware partners, can justify subsidization because it could be considered investment in the future of the Windows Media licensing ecosystem – an interest in which its current partners are only tangentially vested -- or the broader digital lifestyle campaign if Micrsoft eschews Playsforsure as rumored.