Ina Fried talks about a re-org in the Zune division.
The software and services portion of the Zune team–the bulk of its staff–will be added to the portfolio of Enrique Rodriguez, the vice president who currently runs Microsoft’s Mediaroom and Media Center TV businesses. The hardware team, meanwhile, will now report to Tom Gibbons, who also leads the hardware design efforts within Microsoft’s Windows Mobile unit.
This is a move that makes a lot of sense I think and points the way to the probable future of Zune that I outlined In the past.
One way Microsoft could go is uniting the Zune desktop client and Windows Media Player. It makes no sense for them to have two desktop software plays. Beyond that, they could the Zune software and port it to Windows Mobile and make that the de-facto mobile media platform. While Microsoft could continue to support the legacy Zune devices, this could serve as an exit strategy from a device business that has not served them well and allow them to make their stand in the place that makes the most sense for them, in software as a client on their phone platform. But my current thinking is Microsoft is going to stay in the hardware business and that means that they will need to re-think what devices they need to bring to market. Previous generations were OK but for the most part, reflected where Apple had been with the iPod 12-18 months prior.
This re-org pretty much confirms that thinking to me. Split off the Zune software to become the core music and perhaps other media strategy for MSFT and get that service on to as many devices and screens as possible. Simultaneously, drive the hardware forward with a major new refresh (hopefully in time for the holidays and perhaps back to school).