KEY POINTS:
Microsoft's challenger to the iPod - the Zune - has had a less than spectacular debut in the US, slipping down the sales charts as American Christmas shopping activity intensifies.
After claiming 9 per cent of music player sales in its first week on the market, the US$249 ($363) Zune dropped to 2 per cent of the market in its second week, according to research company NPD Group.
That puts the Zune in fifth place, well behind the iPod, which claimed 34 per cent in the same week, but had a 75 per cent share of music player sales in the first nine months of the year.
Reviews of the Zune have been mixed, with its wi-fi and video functions, software interface and digital rights management system all being targeted as needing more work.
"I do feel the Zune is three-fifths baked, rushed to market to feed the holiday electronics frenzy and nowhere near its potential as a wi-fi-enabled portable media device," wrote CNet reviewer, James Kim.
The Business Herald visited several electronics stores in New York and San Francisco, but the Zune's presence was low key, the iPod continuing to dominate.
The lack of a stellar start for the Zune may be down to confusion over exactly what type of music it can play. While it supports a good range of audio file formats - MP3, Microsoft's own WMA and AAC included - playback is limited by the digital rights management attached to the music.
It means that AAC tracks downloaded from the popular iTunes.com music store won't play on the Zune, but tracks ripped to the iTunes software from a CD are unprotected and therefore will.
The device also doesn't support Microsoft's PlaysForSure digital media standard, supported by iTunes' big rivals in the music download space: Rhapsody, Yahoo! Music, and the reborn Napster.
Even Zune salespeople are having trouble explaining exactly what playback options are available. At CompUSA in San Francisco, when asked if music from download services other than the Zune Marketplace would play on the Zune, a salesman replied: "Out of the box it can't, but I think there's a plug-in you can download for that."
Down the road at San Francisco's Apple store, a giant snowman wielding an iPod Nano music player sat in the front window, grinning wickedly as shoppers milled around the displays. Apple's simple model of one device, one music service keeps working for the Californian computer company.
Microsoft wants a piece of the action with its Zune-Zune Marketplace combination but, with sluggish sales, the Zune is likely to remain a niche player this Christmas.
