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Zune sales hit 1 million; has ways to catch up

BY CSA STAFF

Last month, Microsoft got a pleasant surprise when a pink version of its Zune mp3 player—launched in early May to entice Mother’s Day shoppers—became its second best selling version ever behind its standard black player. But despite that success and Microsoft’s willingness to innovate, the Zune has a long climb ahead as it tries to gain market share from Apple and its iconic iPod.

A quick glance at the numbers tells the story. In June, Microsoft marked a milestone by selling its one-millionth Zune player after nine months on the market. But just one month earlier, Apple announced that worldwide sales of iPods had topped 100 million in a little over five years.

That explains why Zune commands only a small percentage of the mp3 player market and occupies the No. 4 spot with just a 2.3% share. Apple is the runaway leader in sales with a whopping 72% share of the market, followed by SanDisk with 11.7% and Creative Industries with 4%.

Though it has some catching up to do, the Zune is on pace to establish itself and managed to reach Microsoft’s goal of selling 1 million players by June. And NPD Group industry analyst Ross Rubin says Microsoft has shown in the past that it knows how to sell its products and build market share.

“The company has an excellent track record in making gains in market share in successive years with new products,” said Rubin. “And they have the resources and the expertise to carve out a bigger share of the market the next few years.”

To that end, Microsoft has been trying to find ways to make the Zune stand out from the competition with unique options like wireless music sharing, which allows users to wirelessly share temporary copies of songs with other Zune players and have them be erased automatically after a few days.

Microsoft also has been willing to experiment with new colors and special versions of Zune. It had a hit with its pink version in May and Microsoft plans to release another special version this month based on the popular video game “Halo.” The player will come with preloaded art and sound from the game and will be sold exclusively at GameStop stores.

Rubin also expects Microsoft to come out with a new version of Zune with a flash-based memory, a sector that currently leads sales. “Flash-based mp3 player sales account for a majority of the market,” said Rubin. “So they’re going to have to enter the flash space if they want to capture a significant share of the [overall] market.”

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Hooker names upholstery head

BY CSA STAFF

MARTINSVILLE, Va. Hooker Furniture has appointed Alan Cole to the new position of evp of upholstery, in which he will oversee the operations of Hooker Furniture subsidiaries Bradington-Young and Sam Moore Furniture.

In addition to overseeing the operations of Sam Moore and Bradington-Young, Cole will help develop further growth plans for Hooker’s imported accent chair product line. He also will be involved in strategic planning for HFC and will oversee any future acquisitions of upholstered furniture operations.

 

Cole, who has held senior executive positions at leading upholstered furniture companies including Broyhill, Berkline and Schnadig, “has the expertise in upholstery that uniquely qualifies him to help us realize one of our strategic objectives, which is to become a more important and complete upholstered furniture resource,” said Paul Toms Jr., chairman, ceo and president of Hooker Furniture.

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Best Buy selects new ad agency

BY CSA STAFF

MINNEAPOLIS Best Buy announced Thursday that it has chosen BBDO New York as its advertising agency for the Best Buy brand. The selection of BBDO follows a multi-month-long review for the Best Buy brand account, which was previously handled internally.

“We believe this partnership with BBDO New York will enable us to support the company’s aggressive growth goals and to build and enhance our capabilities,” said Ruby Anik, Best Buy’s senior vp of marketing communications. “We are excited to leverage BBDO’s creative expertise, brand experience and spirit of collaboration in further differentiating Best Buy as the consumer’s trusted guide to technology solutions.”

BBDO New York’s scope of work will include account planning, ad strategy and execution, and media and consumer connection planning. Estimated billings, as measured by media spending, will be $170 to $200 million. The firm will begin work immediately on internally-focused projects supporting Best Buy’s brand position.

 

In addition, Best Buy will expand its relationship with Crispin, Porter + Bogusky beyond Geek Squad to partner on business development and in-store activation opportunities for the Best Buy brand.

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