One more quick story from the software conference (here’s the first).

Microsoft has a booth here, and like most companies they’re trying to entice people to their booth and convince them to submit their business cards for a drawing for some gadget so the company can assault us with junk email and telemarketing calls all year long. Most companies are giving away iPods - some video iPods, some nanos, some shuffles. You know where this is going.

Microsoft is giving away a Zune. I didn’t stop at their booth, but here’s what I overheard:

Conference attendee: Are you having a drawing?
Microsoft employee: Yeah, absolutely, we’re giving away a Zune.
Conference attendee: A zoon? What’s that?
Microsoft employee: It’s Microsoft’s version of the iPod.

Thanks for really shooting for the moon, Microsoft. An inferior knockoff of the market leader. Great.

Here’s what I said about the Zune back in October, before it was released to the public:

I can’t think of a single rational reason to choose Zune over the iPod right now. I’m not familiar with iPod’s current competitors, and it’s probably pretty likely that Zune will quickly become the 2nd-most popular portable digital audio player. And I’m glad iPod has some potential competition. But unless the 2nd generation Zune arrives fairly quickly and with quantum improvements I have a hard time seeing it take more than a few percentage points of market share away from iPod. And since the other competitors have already positioned themselves as iPod alternatives with lower pricing, I don’t see Zune taking much market share from them either. A year from now I think the Zune will still have significantly less than 20% of the market, with iPod maintaining its dominant position.

I stand by my earlier prediction. The latest numbers show the Zune as #2 among hard-drive based players, but with less than 10% market share. And that doesn’t include the wildly popular flash-based players like the iPod nano and shuffle.