The software maker said Wednesday it was pleased with response to the device, which debuted at No. 2 in research firm NPD's weekly sales ranks, but fell to No. 5 last week.

"We're forecasting just over 1 million units for the fiscal year," said Jason Reindorp, marketing director for Zune at Microsoft. "We feel pretty good about that number."

"We're forecasting just over 1 million units for the fiscal year," said Jason Reindorp, marketing director for Zune at Microsoft. "We feel pretty good about that number."

The Zune went on sale in mid-November. In its first days, it ranked near the top of Amazon.com's electronics sales chart. According to NPD's recent ratings, though, it now holds about a 2 percent market share.

Reindorp said sales have been going "pretty well" and are "pretty much on track" with the company's initial forecast. "Microsoft has a very realistic view of the landscape," he said. "There wasn't any foolish thought of coming in and turning the whole market around."

IDC analyst Susan Kevorkian said that the company's projections are similar to her estimates. "We think that Microsoft had relatively modest expectations in terms of unit shipments and sales going into the Zune launch."

Kevorkian said that she expects Microsoft to have sold about a half-million of the devices by the end of December. As a point of comparison, research firm IDC forecasts that there will be 21.5 million hard drive-based music players sold this year, the vast majority from Apple Computer. Microsoft estimates that its better than 1 million devices will give the company about a 10 percent to 15 percent share of the market for music players with 30GB or more of storage. The company also projects that Apple and Zune combined will have 98 percent of that market.

Song sales Beyond the device itself, Microsoft wouldn't say how many music tracks it has sold through the Zune Marketplace or say how many paid subscriptions to the Zune Pass music service it has sold. However, Reindorp did say that the company has not been heavily promoting the subscription option.

"We're being even more realistic with the Zune Pass," Reindorp said. "Our numbers are really small."

The company said it is seeing a gap between the number of devices that are being sold at retail and the amount that have been hooked up to a PC and activated.

"We think a lot of Zunes are sitting underneath Christmas trees," Reindorp said.

Microsoft tried for years to rival Apple's iPod by offering an underlying media technology that could be used by a variety of music services and devices. However, Microsoft and the industry struggled with compatibility and simplicity. Microsoft decided earlier this year to go it alone with Zune.

The software maker announced plans for the Zune in July, saying the device would stand out from the iPod through a built-in Wi-Fi connection. Although it eventually plans a family of devices, Microsoft opted to start in the U.S. with only a single 30GB device, though it does come in three colors.

The biggest surprise, if any, has been the demand for the brown version of the player. Although resellers generally haven't had trouble keeping any of the Zune models in stock, where there have been occasional supply issues, they have been with the brown model.

Copyright: news.com



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