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Microsoft Hedges On Zune Future

3/15/2011 01:58:36 PM Eastern

New York - Microsoft stopped
short of denying a Bloomberg report that it has stopped developing new Zune
portable media players (PMPs).

"We have nothing to announce
about another Zune device," the company said while noting that it recently
launched the ZuneHD in Canada.
Executives "remain committed to supporting our devices in North America," the
statement added.

The first Zune launched
in late 2006
through 30,000 outlets, and the ZuneHD touchscreen version
with embedded HD Radio launched
in 2009
with Wi-Fi and the ability to store downloaded music and movies. Music
can be downloaded directly to the device via Wi-Fi. It also features a web
browser, games and subscription-download service.

 The device's share of the MP3/video player market
has always been small. In 2009, its retail unit share was 2 percent, tying with
Sony and GPX for a spot in the top five. Apple was first, at 73 percent
followed by SanDisk, at 8 percent, The NPD Group statistics show.

 In 2010, Microsoft didn't even make the top
five.  Apple was first, with 77 percent,
followed by SanDisk, at 7 percent; Mach Speed, at 4 percent; Sony, at 2
percent; and Coby, at 2 percent, NPD said.

During the past couple of years,
fewer retailers have stocked the device, and the company hasn't launched a new
Zune since 2009. Microsoft has, however, added Zune-like features and a
Zune-like interface to its Windows Phone 7 smartphone OS.

 "We are thrilled by the consumer excitement
for Zune across many new platforms, including Windows Phone 7 and Xbox 360," Microsoft said in a
statement. "Our long-term strategy focuses on the strength of the entire
Zune ecosystem across Microsoft platforms."

Following the launch of the
ZuneHD, the company replaced its Xbox
Live Marketplace with the Zune Marketplace and enabled users to move downloaded
audio and video content from the marketplace between Zunes, Xboxes and PCs.