Did Microsoft Copy the Wrong iPod?

CNN Money today ran an article titled “Don’t Cry for the Zune Just Yet”, which reads like a regurgitated Microsoft press release, bragging that the Zune captured second place during its first week on sale, at 9 percent, 1 percent ahead of SanDisk.

But if you look at Amazon’s current MP3 player sales rankings, the top-selling Zune (black) is all the way down in 18th place, behind a slew of iPod models and a couple of players from SanDisk and Creative. The second-best selling Zune is all the way down in 36th place. And the white Zune is at #68, which is so far down the list that it’s behind the 512 MB old-school original iPod Shuffle.

Now, those rankings are for all MP3 players, which might not be fair to the Zune, because it includes cheaper, smaller-capacity flash players which sell in great quantity. But, the overall MP3 player market is exactly what the CNN Money article is about, so it’s not unfair, either.

If we look at Amazon’s rankings for hard-drive-based players, the black Zune is in 6th place, behind all four current iPods and the black 30 GB Creative Zen Vision:M. (Interestingly, the Zen is in 4th, one spot ahead of the white 80 GB iPod; one thing Amazon’s rankings make very clear is that black is more popular than white, across all brands.) The brown Zune is in 11th, behind not only another Creative player, but also three models of discontinued original 5th generation iPods from 2005 — i.e., Amazon is currently selling more year-old iPods than they are brand-new brown Zunes.

Lastly, Amazon’s rankings for all “electronics”. This gives you a better sense of where these players fall in the grand scheme of things. The black 30 GB iPod and silver 2 GB iPod Nano top the list, followed by the Canon PowerShot SD600 and the $57 1 GB SanDisk Sansa M240. Then a bunch of iPods, cameras, digital picture frames, and GPS receivers. The only other non-iPod MP3 player in the list is the Zen Vision:M. The top-selling Zune (black) is all the way down at #62, which is a dozen spots lower than this record player.

(These Amazon lists all update hourly, so they’re very likely to be different whenever you’re reading this.)

Looking both at these Amazon rankings and the iPods I see people using out on the street on a daily basis, I can’t help but think that Microsoft copied the wrong iPod. The Nano is the sweet spot for Apple, and it’s the Nano-ish players from competitors that are registering in the sales charts. If Microsoft only had time to produce one Zune model in time for Christmas, and if their goal was to lay claim to second place and establish the Zune as the iPod’s most serious rival, they should have done a pocket-sized flash memory player rather than the deck-of-cards-sized thing they ended up with.

If the Zune’s best week was its first week, it’s in trouble — and it looks to me like its sales are sinking, not rising.