Gates praises iPod, labels Zune a "modest" competitor

When we report on the sayings and sound bites of higher ups at technology companies, we tend to cover them from a negative angle because, as you well know, execs are pretty fond of belittling their opponent's products. The latest exception to this rule comes from none other than Bill Gates, who recently praised Apple's iPod, calling it "phenomenal, unbelievable, fantastic" in front of an audience at Stanford University, California. The timing of these words -- only a few days after the launch of Zune -- would be the most surprising aspect of his speech were it not for Gates' later musings on Microsoft's aim with the Zune. According to Gates, the plan with Zune is "more modest" than total domination of the portable media player market, with Gates elaborating that the company wants to "excite people about the concept" of sharing music and video wirelessly through Zune. Perhaps the company's "problems" in Europe and the lackluster reception towards the current iteration of Zune -- hence the focus on Zune's primary innovation, WiFi -- have calmed Gates, or maybe the iPod franchise has grown so huge that even its main competitors can't conceive of aiming for first place. Either way, we have a feeling that the words contained in emails exchanged between Zune HQ and Gates over the weekend won't be half as measured as those in this speech.

[Silver @ Nov 18th 2006 4:21PM]

What a load. Microsoft has no intention of being a bit player in the digital music business. This claim that they only hope to pull modest market share from Apple is disingenuous at best. Since when has Microsoft been content sharing a market with a competitor?

Expect them to use their entire playbook of cheap tricks (starting with the sleazy payola to Universal, already in effect) to attempt to bulldoze their way to the top despite a lackluster product. It's the Microsoft Way.

[Patrick @ Nov 19th 2006 7:53AM]

Help me out here. Why does everyone expect that the release from Microsoft is one to conquer the world? The target age group is 15-22. Not 25-50. Microsoft didn't even have much pomp and circumstance around this release other than in store displays. For their target market, I believe that it hit a home run. For the rest of us... it isn't targeted to us, and we should respect the fact that Microsoft didn't come out and try to create 1 device that markets to all. For the rest of us that like Plays For Sure or Apple's ITunes - it didn't go away, and there are numerous hardware vendors out there that have made many more devices with more creative ideas than what is present in the Zune.
Please separate your vitriol for Microsoft from your product comments because it hampers your objectivity in your assessment.

[Shmoe @ Nov 18th 2006 4:26PM]

Well, if they had done this thing right, then they would have a shot, as it is, leaving out DVR-MS support as well as other file formats and such a small drive for the same price as the ipod, they really shot themselves in the foot. Also, there should have been much better integration with Media Center, the 360 and Media Player 11 from the get-go. A larger drive for less than the ipod would help too. Why does MS always release things half baked?

[Matt @ Nov 18th 2006 4:37PM]

Ok correct me if I am wrong, but the Zune cannot sync with your PC over wireless?

Make it sync without having to plug anything in and it will eliminate the ipod within a year (assuming ipods dont end up with wifi-sync too)

[jamie @ Nov 18th 2006 9:26PM]

Ipod is huge because most of its users are not geeks, so syncing wirelessly is not that big an issue.

[cori @ Nov 19th 2006 10:27AM]

agree with jamie; I am a geek and happy with most of my Microsoft products, but wouldn't give up my iPod because I didn't have to plug in the Zune.

[Guy Incognito @ Nov 19th 2006 11:14AM]

What good is wireless sync? Is it really such a friggin' hardship to connect a cable? Okay, so you don't have to plug in to sync, great. But then the wireless eats your battery life, so you have to plug in anyway to recharge.

For a music player, wireless sync is just a 'looks good/cool (to n00bs) on paper' feature.

[Sam @ Nov 18th 2006 4:44PM]

Giving the Zune all the same limitations as the iPod (as well as a few more) means there is no way I'm getting locked into a Zune or an iPod anytime soon. I'm content with my Sansa (and even its not perfect, but can be found for a bargain).

I bet MS gives the Zune a bigger hard drive and integrates it much closer to the Xbox 360 (allow it to act as a portable version of the 360 hard drive and play movies/tv shows/trailers from Live as well as store gamesaves, etc). That's pretty much the only way they will really sell any... well unless someone figures out how to hack it and put Linux on it.

[FB @ Nov 18th 2006 6:20PM]

Nothing new, imho. Bill Gates always loved the Mac, regularly had Macs in sight on photo's of his office. He more then once publicly declared in the 80ies and 90ties that he wanted to copy the Mac. Actually, Microsoft was from the early days of personal computing one of the main developers for the Macintosh (Excel and Word entered the Windows market a decade behind the Mac market).

Now the iPod is not a Mac. But again they might want to slowly get grip on this market of personal music and movies. iPod bashing is not the best strategy to get there.

[George @ Nov 18th 2006 4:55PM]

you people always have something negative to say, at least he doesnt sound like a evil empire who is trying to take over your lifes like walmart does.

[emiliano @ Nov 19th 2006 12:57PM]

I predict.......
1) 60 or 80 GB Zune available by March 2007
2) Zune will have a Hard drive mode by March 2007
3) Support for .avi and DVR-MS support by March 2007
4) Europe and Canada will have Zune by March 2007
5) Pink Zune maybe Orange by again March 2007

[Rob @ Nov 18th 2006 5:02PM]

What limitations are there with an iPod? The limitations I see are if you buy music from the iTunes music store (which I rarely do). I love the iTunes interface and love how easy it is to manage my music between my computer and my iPod.

[tekdroid @ Nov 18th 2006 7:04PM]

iPod gives you one-way (PC-to-device) transfers - Apple does not officially support device-to-PC transfer, for instance. Artificial restriction. It ties your database to your PC, too. Other brands offer standard Mass Storage connections which let you put songs on and take songs off the device natively in virtually any operating system - an unlimited amount of times. Two-way, no software, just like a regular USB data drive.

Sure, there are third-party applications for iPods that can be used on different operating systems to let you put songs from iPod to computer (two-way), but that means still loading software to get playable music on (and off) the device. With other devices you can just drag-n-drop/ copy-paste, any way you please just like you do any other file - and it really doesn't matter which (modern) operating system you use - it will work as long as it supports Mass Storage devices (virtually all do).

Some other non-iPod portables offer:
1) removable flash storage
2) easily removable batteries (500 charges is pretty much all you can expect until the embedded battery has pretty much served its purpose and needs to be replaced. That always means disassembling the iPod - and voiding the warranty, if it's not already up)
3) broader codec support (Ogg Vorbis, FLAC, etc)
4) some offer USB-On-The-Go, too (USB host). The ability to send pictures from your digital cam straight to the device without a PC, for instance. Handy when the flash memory in your cam gets filled.

And of course, no Digital Rights Restrictions of any kind (unlike Apple, Zune, Sony, etc)

There's a big world out there beyond the iPod, and IMO, most innovation occurs there.

[Mr. B @ Nov 18th 2006 5:10PM]

It's too bad Microsoft isn't using their power to stick it to the recording industry with an open device rather than pandering to it with bribes and crippled hardware.

[GSP @ Nov 18th 2006 5:17PM]

Gates is simply saying what almost everyone already knows ... but I suspect his reasoning may simply be to lull Apple into feeling complacent. I seriously doubt that ol Steve is gonna make that mistake again though. Its definitely gonna get more interesting with time, that is for certain, 'cause right now its not even a horse race.

[Terry @ Nov 18th 2006 5:26PM]

I'm pretty surprised that Microsoft doesn't sell the Zune at a big loss to try and take market share.

Maybe they're already doing this, I don't know. Or maybe they figured out that it didn't even work too well with the Xbox, which generates income from every game sold, a feature the Zune doesn't quite have.

[Xayzer @ Nov 18th 2006 5:29PM]

I know why Gates said that.
Now the people at apple are so confused, they won't be able to sleep for countless nights while trying to figure out why he said that:D

[Jeremy Kates @ Nov 18th 2006 5:49PM]

The problem is that MS has more money then they know what to do with. They can do this kind of stuff; well because they can. They have almost as much cash on hand as apples market cap. They are the 300 pound gorilla, and you might as well get used to it because it's not going to change anytime soon.

[The_one_who_knows @ Nov 18th 2006 6:19PM]

Microsoft loses money on every Zune they make, just like they do/did on XBOX. MS Way is software, not hardware, (hence Micro-Soft[ware]) Gates' vision from 20 years ago hasn't changed: MS sotware running on every device in every home. How long until we'll be buying iPod with Windows Mobile X.0? My prediction, next year.

[Colin @ Nov 18th 2006 7:24PM]

An iPod running Windows Mobile software? That statement alone would be asinine enough, but then you went and said it would happen within a year! Wow. I owe you a whole lot of beer if iPods are running Windows Mobile this time next year.

[charlie brown @ Nov 18th 2006 6:19PM]

I don't get it you post this crappy bit of news that has no meaning but you leave out the fact that microsoft are working and will be SOON bringing out an update that will let you connect with the xbox 360 and PC wirelessly? Are you working for apple?

[crescentdavid @ Nov 18th 2006 6:55PM]

I dunno, I personally think Gates was just acknowledging reality and not trying to polarize folks who potentially might look into owning a Zune. There's no arguing the fact that the iPod has become the Toyota Camry of personal audio players.

[kartman @ Nov 18th 2006 7:07PM]

Not just the Toyota Camry; the ipod line is like the entire Toyota line; one for every budget, from the Yaris all the way up to a Lexus.

[cire @ Nov 18th 2006 7:03PM]

I just think MS is spreading its self to thin, It has its hand in too many places. Stick with what you do best MS office & MS windows. I has too many competitors Apple, google, and sony. I think Ipod is a great product, MS got into this game too late. If it aint broke don't fix it.

[DM @ Nov 18th 2006 10:22PM]

"I think Ipod is a great product, MS got into this game too late. If it aint broke don't fix it."

Put yourself in Bill Gates shoes. When you are the richest man in the world, nothing is too late. Yes, he could lose billions, but that is part of the game, its risk taking. If it aint broke, don't fix it??? Bill Gates is not trying to fix anything, he is just getting in the game the same way Steve Jobs did with the first gen ipod.

[Unbangyourmom @ Nov 19th 2006 2:35AM]

I've owned a bunch of mp3 players and just bought a Zune. They all are subpar compared to the ipod. I've never really like the ipod that much, had a hacked 1st gen, but sold it after a few months, had my share of Creative mp3 player and Sandisk players, tried a bunch of Sony, Samsung for couple of days. As boring as i've gotten of ipods its still the best player around. After about an hour I was pretty bored of the Zune. Sure the video is pretty brilliant, but its still too small to watch for more than 5 minutes. I actually love the software which shows album art when in the grouping. Its like WMP9/10 on roids. Have they finally gotten iTunes 7 workin yet? I actually really hate iTunes, its quite a mess. I genearlly organize my songs with something else and then have iTunes sync my ipod. I've tried all the other alt software for ipod, and they are pretty good, but they all have something small missing like not syncing lyrics and stuff. As for drag and drop support, it doesn't really matter much as you can have the 3rd party software runing straight from the ipod, so no big deal. On retarded thing is the Macs at school don't seem to like ipods. Sometimes it connects, sometimes it doesn't WTF. I force disk mode and after half an hour it usually magically appears. At the end of the day its going to take a lot more than a rebadged Toshiba to knock ipod of its pedistal.

[applesucksLeo @ Nov 18th 2006 7:04PM]

A while back J Allard gave an interview and referred to the iPod as the �Model T of mp3 players�. This was misunderstood as trashing the iPod, which wasn�t his intent. The Model T was the state of the art in technology when it shipped and changed the world. Same with the iPod.

But it�s only the beginning. MP3 players and other connected devices are going to revolutionize entertainment. Think about the combination of mp3 players, Web 2.0 communities, and collaborative filtering.

In 5 years, Zune will have succeeded by shipping a suite of devices that make the vision of �connected entertainment� happen. That would mean (among other things) devices that talk to other devices, connect to the cloud without a PC, music and video recommendations that really work, a community of millions of users sharing their content and tastes with one another.

[Peak @ Nov 18th 2006 7:43PM]

Can't you see that Bill is just trying to make iPod look stupid. He goes out and tells that everyone has Ipods and that's great, but only the few cool people have a zune. He is trying to make zune something different and point out that there's nothing cool with an iPod any more.

Bill can't go out and say that "we will take the markets, like it or not". He's far too clever to do that. Instead he acts humble and fools everyone. Very good strategy indeed. I'm just hoping it won't work

[DM @ Nov 18th 2006 10:36PM]

"Can't you see that Bill is just trying to make iPod look stupid. He goes out and tells that everyone has Ipods and that's great, but only the few cool people have a zune. He is trying to make zune something different and point out that there's nothing cool with an iPod any more.

Bill can't go out and say that "we will take the markets, like it or not". He's far too clever to do that. Instead he acts humble and fools everyone. Very good strategy indeed. I'm just hoping it won't work"

Boy, after reading you first 6 sentences, you were making perfect sense, except for the last "I'm just hoping it won't work". You all of the sudden turned into a fanboy.

[Javaflash @ Nov 18th 2006 7:44PM]

MEMO TO STEVE JOBS...

DON'T PLAY POKER WITH BILL.

The last time you did, you lost your job, your company, your identity...

[SLUSHIE @ Nov 18th 2006 8:05PM]

Microsoft needs to stop putting out devices that are not fully serviced.

I don't get why they release a device then add the services later, instead of providing both from the beginning then updating those services over time.

Its like... well the design of the device is done... so lets just put it out to try and snag some money from it, even though as an entity its not finished at all.

[Ed T @ Nov 18th 2006 8:52PM]

Yes, by all means hang on every word from Bill Gates. He's the man who gave us the SPOT watch, and called Windows 2000 the "greatest engineering achievement of the 20th Century". The guy knows what he's talking about, yup...

[HG @ Nov 18th 2006 8:59PM]

Micosoft is playing 'good cop', 'bad cop'.

Bill is the elder godfather now and above these mundane affairs. Best leave the dirty work to the thugs.

[cire @ Nov 18th 2006 9:05PM]

Well not surprising, everyone seems to be beating up on the software giant, Firefox, Google, Apple & Sony. Hmmm not so tough anymore...lol

[DM @ Nov 18th 2006 9:42PM]

Bill Gates, who recently praised Apple's iPod, calling it "phenomenal, unbelievable, fantastic"

Bill Gates may have meant every word he said, but he's also telling us to read between the lines. Genius.

[netdiiver @ Nov 19th 2006 2:35PM]

Bill Gates, who recently praised Apple's iPod, calling it "phenomenal, unbelievable, fantastic"

--Hmm, didn't Bilbo say this to Smog the Dragon hours before slaying him?

[Doug @ Nov 18th 2006 9:55PM]

The Zune add-ons have already started: New Video podcast support for Zune http://FeedYourZune.com

Stand alone RSS Video Aggregator based on FireAnt platform - all new interface, integrated channel guides from Network2 and FireAnt directory.

[Jeff @ Nov 18th 2006 10:59PM]

Re: tekdroid
What sort of DRM are you talking about on the iPod? I ripped my CDs, put the resulting MP3s on the iPod, and can copy them off if I want, all with no restrictions.

With Sony (I heard they've fixed this on their newer stuff) you had to actually convert your MP3s into ATRAC files, which had pretty heavy DRM on them. And the Zune, since it doesn't work as a mass storage device, doesn't allow you to copy files off of it that I know of. So you got 2/3 right there.

Now if you're talking about iTunes, yeah, that has DRM. The same as Napster, PlaysForSure, and any other downloadble music service or format has.

[theMacpenguin @ Nov 18th 2006 11:42PM]

Despite my nick, I am not a apple fanboy, however I have messed with the Zune and it personally seems clunky and the iPod does allow device to PC and device to Mac. It allows you to transfer all your purchased songs to iTunes as long as you use the same account on both, if your songs are totally legit (like mine: used to p2p but I can't morally do that anymore :D). If not there's Senuti :P

[Chris Jones @ Nov 19th 2006 12:33AM]

IMHO: Here's what happened and what's happening and what will happen: The Mac was made and Apple thereby had a ten year lead on Microsoft. Then Jobs left Apple which did nothing for ten years. Microsoft followed Apple's tail-lights for ten years and finally produced a usable GUI called Windows 95 and beat Apple. Then Jobs came back, made the iPod and Microsoft is once again chasing Apple's headlights. What's happening now is that Apple is accelerating and the tail-lights that Microsoft is chasing are gettting farther and farther in the distance with each year. In other words, now is the time to invest in Apple stock.

[helio9000 @ Nov 19th 2006 12:10AM]

Microsoft, even Allard, has said form the beginning that it would take at least 5 years to even have a chance at unseating the iPod. Anybody who believes that MS thought that the Zune would be a massive "iPod Killer" (the favorite phrase of lazy and brain dead reporters) out of the gate hasn't been paying attention.

>any other downloadble music service or format has.

There are legal music download without DRM. They just don't have the likes of U2 and Madonna.

[HG @ Nov 19th 2006 12:18AM]

DM says: " Gates is not trying to fix anything, he is just getting in the game the same way Steve Jobs did with the first gen ipod."

Steve Jobs entered Bill Gates' game. Remember Janus and then PlaysForSure?

If Zune fails, then what? People will be abandoned again. Why should anyone trust Microsoft after they have bailed out on its other MP3 partners and customers twice.

[BGL @ Nov 19th 2006 8:41PM]

So BG comes out with a perfectly reasonable response to a product that is a success [iPod]. Some people become paranoid and read more into this then there actually is.

Microsoft offer a product. Apple offer a product. Why is that every time MS bring out a product, a flock of people think that a) the product stinks and is behind its competitors or b) if the product is any good, then MS is abusing its power by producing a product that will put others out of business.

Do you really think that if Jobs was the CEO of MS that he would do things so differently. Facts are that both guys will have and have had, different impacts on the world. When all is said and done - does the success of the iPod vs. the Zune really matter that much.

More power to you Bill!!!

[applesucksLeo @ Nov 19th 2006 1:28AM]

For those who don`t think the brown Zune double-shot effect is cool...check this out.http://www.autoweek.com/files/specials/2005_detroit/saturn/aura/images/X05CC_ST001.jpg

[Eric @ Nov 19th 2006 2:50AM]

Why is everyone talking about Zune limitations. One cool feature on the Zune is FM radio, I wish ipod had that. Two is sync, put music from my PC to ZUNE and then copy from ZUNE to my laptop, without any software. ZUNE loads music faster then the ipod, ZUNE also has update coming out for wireless sync.

Here are the facts, the ZUNE will make the ipod better then it would be otherwise. If Apple wants to remain the leader they will have to stay ahead and innovate. MS can put money and smart people to work and just keep making the ZUNE better.

Finally, history tells us that MS has crappy products for versions 1-3, but eventually at some point they get it write and crush their competitor. They did it with their browser verses Netscape (which is dead), they did it with Office verses WordPerfect and Lotus (both of which are effectively dead).

[Intrepid @ Nov 19th 2006 9:41AM]

I would love to see his speech in it's entirity... not just the one line that appeases engadgets apple readers.

[Douglas Hornig @ Nov 19th 2006 11:06AM]

Gates and Microsoft say things in order to increase the company's profit. This was not a moment of weakness on his part. I think what he said was designed to lower expectations in order to make a lousy product appear better.

[Harvey Chute @ Nov 19th 2006 11:27AM]

It's a common tactic, to play down the aspirations of your product, so that you can express surprise later at its stronger-than-expected sales.
Bill's right, though, Zune can probably get to second place but it will be there for a while. iPod has lost a little momentum but it's got a strong lead.

Harvey
http://www.zunerama.com

[DM @ Nov 19th 2006 10:22PM]

Yeah, when I said read between the lines, that is exactly my point.

[HG @ Nov 19th 2006 4:29PM]

Eric writes: "but eventually at some point they get it write and crush their competitor. They did it with their browser verses Netscape (which is dead), they did it with Office verses WordPerfect and Lotus (both of which are effectively dead)."

Microsoft crushed Netscape not by 'getting it right' but by threatening its OEMs that if they bundled Netscape, Mocosoft would charge them more to license Windows.

WordPerfect and Lotus too were crushed by bundling Office with Windows, not because Office was a better product.

The dilemma Mocosoft faces now with music is that songs can't be tied to Windows. In fact the corporate world, which Mocosoft monopolizes and colludes with in order to force us to use Windows at home, isn't interested in music. They're not going to let employees waste company time and money downloading Zune songs.

Also, the profits on songs are small because the music industry gets the lion's share of their profits. Hence, the Xbox model won't work for Mocosoft either.

So when it comes to music, TV, and movies, Mocosoft won't have any of the unfair advantages that they've had before. That's not to say they won't attempt new dirty trick. But everyone knows how Mocosoft does business by now and so no one will sit idle, least of all Apple. Finally, the users and business partners of PlaysForSure and Janus have also learned how shifty Mocosoft is. So it seems Mocosoft has many people that are hip to their tricks.