I'm thinking the iPod and accompanying services are so entrenched MS is going to require something more revolutionary than just a device and subscription service
Yes, that's the real problem for them. The current 800 pound gorilla is based on a very simple model. Buy the player. Copy existing CDs to the player. Buy new CDs, or buy from an online store. (And then there are all the other paths to get music that 'just work.') This is something people can understand pretty easily, as it matches how most folks have used all their other entertainment gadgets over the years. (Buy VCR. Buy prerecorded content, or record from broadcast/cable. Buy CD player. Buy CDs, or more recently, engage in eeeeevil felonious acts and burn your own.)
Then there's the gadget ecosystem built around iPods. That will be tough to crack, but I have this nasty feeling that they may have a dodge in mind. The Consumer Electronics Association (CEA) has established a working group to develop a universal docking standard for portable devices. It's chaired by a Microsoft representative. Microsoft is working with Belkin and others. I suspect we'll see a snap-on interface adapter between iPod and CEA/MSFT style adapters, and a new line of Zune adapters that work with many of the now-standardized iPod docks.
Microsoft looks to be gearing up to do what they do best. Marketing...
They'll be trying to convince people that rented content and 'tethered' players (like US cell phones - locked to a specific service) are the way to go. They won't pitch this as a rental or subscription plan, but rather as membership in an exclusive new community populated by nothing but the very hip. Look for a combination of conventional marketing and targeted astroturfing (blogs, new 'reviews', etc.) This will be mixed with FUD aimed at the competition.
I don't care for subscription plans myself. They seem too much like a deliberate artificial barrier to switching. (Yes, I'm buying unlocked cell phones these days and putting in the SIM for whatever service I want. 8 cents a minute from France to the US, unlimited free incoming calls, cheaper than most US subscription plans sell internal US minutes. I can buy minutes at any tabac stand. Cheap, cheap, cheap...)
I suspect the American buying public that is in the market for music players is smarter than Microsoft Marketing thinks. I hope they don't disappoint me...
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