Zune Strategy Analysis

For Zune, the iPod is the king of hill and SanDisk a distant but relatively strong two as the low cost leader. Apple has attempted to block obvious flanking maneuvers from below through the line extending Nano and Shuffle products and created a new category of device that can be download apps and games, the iPod Touch.
The Zune strategy has historically been aimed directly at Apple with an attack on a broad front. Microsoft has developed an entire line to compete directly against the iPod Classic, Nano, and now the Touch. The major new innovation in the previous generations of Zune was the addition of Wi-Fi. Unfortunately, it was available only for syncing the device to the PC and peer-to-peer sharing of music. Per Ries and Trout,
In includes a new technology screen, HD Radio, and HD Video output (with an optional docking station). It also appears to be phasing out its low end line competing against the Nano, but it’s too early to tell for sure. The HD price points are in-line with the current market offerings and position the Zune HD in the middle of the pack, so it offers more technology for the price. This is because the incumbent’s strength is in incremental innovation along the performance curve for the existing market.
The big hole for the HD appears to be the lack of games and applications versus Apple. Microsoft needs some kind of hook to get people to try the device in the face of the huge Apple App Store. Looking back a few years, the original Xbox strategy introduced a technically sophisticated platform into a market of strong competitors. They also introduced a high end game, Halo: Combat Evolved, through its acquisition of Bungie
Without a major advancement in the offering that competes head-to-head on an Apple weakness or finds a defensible market niche, the future of Zune looks bleak from the Marketing Warfare perspective.
Innovator's SolutionClayton Christiansen advocates that the incumbent leader in a market will win against new entrants who attack on the incumbent’s turf namely the feature set and business model prevalent in the industry.
He advocates three possible approaches to creating new growth businesses. The first is through Sustaining Innovation. Performance improvements are advanced along the most valued dimensions targeting the most profitable customers in the segment who are willing to pay for them. Examples: Microprocessors, disk drives, Flash memory). This is the playing field of