Microsoft Zune In Trouble

For most heavy Windows users, the Microsoft Zune seemed to be Microsoft’s threat to the iPod market. The Zune was released in November 2006 with big challenges but high hopes. Now, it seems the Zune isn’t fairing so well. Microsoft reported that the Zune dropped $100 million in revenue this past quarter, a decline of 54 percent from the year before.

Apple reported as well this past week that their iPod is doing well. According to Apple, “Apple shipped 22.7 million iPods in the quarter ended Dec. 27, up 3 percent compared to a year earlier.”

Steady PC declines have rocked the once-solid software giant and now analysts question if Microsoft will keep the Zune if it continues to decline. It wasn’t all bad news for the “entertainment segment” of Microsoft – the Xbox 360 sold 6 million consoles (from 4 million the previous year).