Analysis: The Zune Is Official, But So What?

Microsoft's official announcement of its much-hyped Zune music player came today, just 48 hours after Apple released its updated arsenal of iPods, a new version of iTunes, and a movie download service. So what's new and what does it all mean?



First off, the details of the Zune are basically as expected—30GB hard drive, video playback, wireless sharing, and a 3-inch screen. But Microsoft filled in a blank (or at least part of it) as regards the rest of the platform; namely, the Zune Marketplace and the Zune management software. These parts are at least as critical as the hardware itself, and will ultimately determine the player's success or failure.



According to the Microsoft press release, in addition to downloads from the new service you'll be able to get a Zune Pass, which gives you an "all you can eat" subscription to the Zune Marketplace. Score one for MS, since Apple still doesn't offer subscriptions for iTunes, although I admit that I'm personally not big on the idea of subscription music.



Another huge plus is a program called Microsoft Points, which lets you buy tracks without a credit card. This is a major sticking point with many iTunes users, since many people still don't feel comfortable giving out credit card information. I do hope they'll have some kind of parental control in place, though, and I wonder how you'll get these Microsoft Points in the first place. It sounds like it'll be some kind of pre-paid deal, but details are still vague.



One very interesting part of the announcement—albeit not an unexpected one—is that the Zune will sync with your PC via new Zune-specific software. But that's not all. The new software will import your files from Windows Media Player and iTunes, including the big three audio formats (WMA, AAC, and MP3), as well as JPEG photos and a few video formats (MPEG-4, WMV, and H.264). Noticeably missing is some kind of DRM import from Windows Media Player. While certainly no one expected Apple to suddenly license FairPlay, which protects its iTunes-purchased content, it wasn't out of the realm of possibility that Microsoft would offer some kind of transfers for protected WMA files purchased from the various non-iTunes online music stores.



Granted, offering cross-compatibility with PlaysForSure downloads would have miffed PlaysForSure vendors even more than MS has already. Samsung has already dropped PlaysForSure support from its latest player, the YP-K5, and is planning its own music-download service, now that it seems the major record labels are letting pretty much anyone license enough tracks to fill out a 2 million-song catalog.



As far as the Zune's wireless sharing feature goes, I was definitely hoping it would be more along the lines of the MusicGremlin service, which lets you share tracks with people who are connected to a wireless network and then in turn connected via the Internet. Instead, MS has limited sharing to players within wireless range of each other. Of course, that may change with a firmware update.

No column about an as-yet nonexistent product can be complete without a prediction of future success or failure. My take on it is that until we see how well the Zune player, service, and software all work together, there's really no telling how it will do. Also, a major piece of the puzzle is still missing: Pricing. If Microsoft can secure good enough deals on its catalog to offer competitive pricing, then it has a fighting chance. And of course, Apple just upped the ante by offering movie downloads as well as TV shows and music.

In any case, I predict that Microsoft will lose bundles of money on this—which the company itself says it expects to do through 2008—until it can work out all the kinks in the Zune platform. Apple, on the other hand, is expert at getting things mostly right (yes, sometimes with a couple of bugs) out of the box, so my money is still on Steve Jobs for the next few years.

Ford Offers 75,000 Workers Buyouts

The Ford Motor Company and the United Automobile Workers union agreed today on a program that will offer buyouts of up to $140,000 to all 75,000 of Ford’s hourly workers in the United States.

Ford said it would announce details of an expanded version of its sweeping plan for overhauling the company, called the Way Forward, at 7 a.m. Eastern time on Friday. The new steps are expected to include further cuts in white- and blue-collar jobs, spending cuts and changes in Ford’s lineup of car and truck models and brands.

The buyout program, which is similar to one offered by General Motors to all 113,000 of its hourly workers earlier this year, was announced by the union in a fax message sent to leaders of its locals. At G.M., about 35,000 workers accepted the offer.

“Once again, our members are stepping up to make hard choices under difficult circumstances,” the union’s president, Ron Gettelfinger, wrote in the fax. “Now, it’s Ford Motor Company’s responsibility to lead this company in a positive direction — which means using the skills, experience and dedication to quality that U.A.W. members demonstrate every day in order to deliver quality vehicles to customers.”

Marty Malloy, Ford’s vice president for labor affairs, said the agreement was “another example of the way we are working together on business issues to address the needs of our employees and the needs of the company."

The largest buyout payment, $140,000, is available to Ford workers age 55 or older with at least 10 years experience who agree to leave. They would receive a pension but forfeit their retirement health care coverage.

Any Ford worker is eligible for a $100,000 package, regardless of years of service. They also would receive a pension but give up health care coverage.

Workers with 30 years of experience can receive $35,000 and retire immediately with full benefits. Most of the 35,000 workers who accepted the incentives offered at G.M. fell into this category.

Under the Ford plan, union members who work for Automotive Components Holdings — the business unit made up of auto-parts plants that Ford took back from Visteon, its former parts subsidiary — also would be eligible.

“Our goal is to help our members and their families, and to make sure any reduction in the work force at Ford takes place on a voluntary basis,” said Bob King, the vice president in charge of the U.A.W.’s Ford Department. “We remain deeply concerned about Ford’s loss of market share and committed to working together to deliver vehicles consumers want at a price they can afford.”

The original Way Forward plan, announced in January, called for Ford to cut 30,000 jobs in North America, and close 14 plants through 2012. Under that plan, Ford offered buyouts to workers at the plants it planned to close, but only about one-fifth, or 6,200 workers, accepted the offer.

Since then, Ford has been hit hard by the decline in sport-utility and pickup-truck sales, caused in part by high gasoline prices. Ford has lost $1.5 billion so far this year.

Now Ford is expected to speed up those cuts and plant closings by several years.

Dan Hyatt, a repairman at Ford’s truck plant in Wayne, Mich., said this afternoon that he was not interested in a buyout, unless his plant shuts. “I’ll be here when they lock the doors,” said Mr. Hyatt, a veteran of 15 years at Ford. But “everybody’s worried,” he said, that the Wayne plant will among those that will close.

Counting both Ford and G.M., nearly 200,000 automobile workers in the United States have now been offered incentives to leave their jobs this year.

Last week, Ford said that its chief executive, William Clay Ford Jr., would give up that post on Oct. 1, though he would remain chairman. The company named Alan R. Mulally, a Boeing executive, as its new chief executive. Mr. Mulally, who has no automotive experience, ran the commercial airplanes group at Boeing, where he worked for 37 years.

Ford said today that its highest-ranking woman executive, Anne Stevens, would retire. Ms. Stevens, 57, was chief operating officer for its Americas division, and one of the original architects of the Way Forward plan.

IMF Chief:U.S.slowdown the Key Topic

The chief of the International Monetary Fund said Friday that a key topic for the global economy is how it will adapt to slowing growth in the U.S., although so far the world has proved resilient in the face of higher interest rates and surging oil prices.

The IMF projects that global growth will rise 5.1 percent this year before moderating a bit to a still strong 4.9 percent in 2007 _ both a quarter-point higher than it forecasted in April.

But it warned in its World Economic Outlook, released Thursday, that one of the biggest risks to global growth was a likely slump the U.S. economy caused by a cooling of the housing market. It sees U.S. growth slowing to 2.9 percent next year from a projected 3.4 percent this year.

"One important question ... is how the world will adapt to a less buoyant U.S. economy," Managing Director Rodrigo de Rato said during a press conference. "Of course that doesn't mean that the U.S. slowdown will be dramatic but certainly we are in a less dynamic environment, although still a very positive one in terms of potential in the U.S."

De Rato said that the world economy has shown its toughness amid higher energy prices and monetary tightening by the world's major central banks. "The world economy has been able to respond positively," he said.

But he warned that "policymakers need to be ready to adapt to a more difficult environment" in the coming year.

The IMF chief also said he foresees no quick fix to rectifying global imbalances of trade and investment. Over the summer, the Washington-based institution invited the U.S., China, Japan, Saudi Arabia and the 12-nation euro zone to take part in multilateral consultations on addressing the issue.

"Global imbalances are a complex problem that took many years to build up," de Rato said. "It would be unrealistic to expect the problem to be resolved through a quick fix."

De Rato declined to say if he thought proposed reforms in the voting structure of the IMF would be approved, though suggested the results so far has been positive.

The fund's executive board has approved a two-step plan to give more weight to emerging economies in recognition of their growing share of the global economy.

As a first step, the IMF has proposed boosting the voting shares of four countries _ China, South Korea, Mexico and Turkey _ it considers most underrepresented by increasing their quotas, or financial commitments, to the Washington-based fund.

Within two years, the IMF plans to rework the voting shares of the all 184 member countries.

"What is clear is that there was a very clear majority on the board to endorse the resolution," de Rato said.

The proposal must be approved by 85 percent of board of governors.

Each country's vote, however, is determined by its quota. The U.S. vote, for example, counts for about 17 percent of the total, and Japan counts for 6.1 percent. The Pacific Island nation of Palau has voting share of 0.013 percent.

While nearly all member countries support reforming the IMF's voting structure, several have expressed reservations about the proposal being considered.

India wants the IMF to adopt a single, new formula for calculating quotas, not doing it in stages. Mercosur, the South American trade bloc that includes Argentina, Brazil, Paraguay, Uruguay and Venezuela, has demanded greater voting power in the institution.

Even China, one of the immediate beneficiaries of the changes, has said the reforms doesn't give other developing regions such as Africa, enough voice.

The gathering is expected to draw 16,000 delegates and other participants _ but few protesters due to Singapore's ban on outdoor demonstrations, citing concerns that street protests could be exploited by terrorists for possible attacks.

In Indonesia, activists plan to gather on Batam island, a short ferry ride from Singapore, to hold seminars, but protests have been banned.

The IMF, established in 1945, fund works to foster economic and financial stability, avert crises and can aid countries in trouble.

Report $250 Wii for 19 Nov US launch

As Nintendo officially revealed details about the Wii's Japanese launch in Tokyo, a New York Times report answered the questions on millions of US gamers' minds: when will the Wii go on sale there? What will it cost? How many games will it have at launch?

As it turns out, the console will arrive in North America and South America on Sunday 19 November, according to the Times. That puts the console's US launch just two days after that of its archrival, the PlayStation 3, which has recently seen its own debut scaled down and delayed in Europe.

But while only 400,000 PS3s will be available at launch, the Times claims that the Wii will be "far more available in stores this holiday season" than its competitor due to its cheaper and simpler form factor. The company now plans to ship 4 million Wiis worldwide by the end of 2006, nearly double the 2 million to 2.3 million shipped PS3s Sony is now forecasting.

As many suspected, the Wii will cost $250 (£130) in the US, according to the article. Since Nintendo executives have said it would be under $250, the probable final price will be $249.99 or $249.95. It will also reportedly have over 25 first- and third-party games available at launch, with up to 30 on shelves by the end of the year. First-party games will cost just $50, $10 less than most third-party PS3 and Xbox 360 games. It was unclear how much third-party Wii games will cost.

The report also said that the classic NES, SNES and N64 games downloadable to the Wii's virtual console would range from $5-10 in price, in line with most Xbox Live Arcade games. Some 30 titles will be available at launch, including unnamed installments from the Donkey Kong, Zelda, and Mario franchises.

But while many had hoped for a console that cost $199 -- or less -- the Wii will have something not seen in a Nintendo launch since the SNES -- a game packed in with a console from day one. (Although several GameCube bundles were offered post-launch.) As rumoured, the console will come with the Wii Sports compilation that was shown off at E3 earlier this year. The game comp will allow players to engage in baseball, bowling, golf and tennis using the Wii's motion-sensing controller.

"Our goal is to bring gaming back to the masses," Nintendo of America president and chief operating officer Reggie Fils-Aime told the Times. "You see that in our pricing, you see that in the number of units we plan to make available this year and you see that in how we are positioning the Wii to appeal to every member of the household, including but not limited to the hardcore gamer."

The Times also re-confirmed that the most anticipated game for the Wii, The Legend of Zelda: Twilight Princess, will be available by the end of the year, as will Excite Truck. However, the first Mario game for the console will now reportedly not arrive at retail until 2007.

The article also claims the Wii will have Web-surfing capabilities akin to that of a home computer. "Perhaps most intriguing, the Wii will make it possible to browse the Web on the television," said the report. "Microsoft's Xbox 360 does not permit this because that could negate the need to buy a Windows PC." Attempts to clarify the Wii's exact Internet capabilities with Nintendo reps had been unsuccessful at time of publication (probably because of the late hour in the US).

Nintendo also appears to be moving away from its GameCube-era "game consoles should be for games only" mantra. Besides the Wii's previously announced DVD playback abilities, the console will also have many multimedia functions. "There will be a photo channel that will allow users to use the Wii to display digital photographs on television," read the report. "There also will be an easy-to-use interactive news channel and weather channel." These media functions are demonstrated at length via a series of videos on the Japanese Wii.com Web site, and a still from the English-language version can bee seen on the official New York Times Web site.

"We are including all of these capabilities as part of our overall strategy to expand the gaming market," Fils-Aime told the Times. "Broadening the market is important because it will breathe new life into this business. Otherwise, this industry is moving down a path of being more and more limited to the hardcore gamer."

As for Europe, Nintendo is holding an event in London on Friday to reveals its Wii launch plans for the continent.