ABI Research Survey: 58% of iPod Owners Planning Another MP3 Player Purchase Will Consider Microsoft's Zune.

NEW YORK -- A new survey conducted by ABI Research has shown that many prospective MP3 player buyers-even owners of iPods-would be likely to choose Microsoft's Zune player. 1725 teenage and adult US residents were asked whether they planned to buy an MP3 player in the next 12 months. Of those responding that they were likely to do so, 58% of those identifying themselves as existing iPod owners and 59% of those who owned other brands said they would be "somewhat likely" or "extremely likely" to choose a Microsoft Zune player over an iPod or another brand of MP3 player.

"Our conclusion," says principal analyst Steve Wilson, "is that iPod users don't display the same passionate loyalty to iPods that Macintosh users have historically shown for their Apple products." Only 15% of iPod owners said they were "not very likely" or "not at all likely" to choose Zune.

So is Zune attractive enough to build anything like iPod's massive sales record? ABI Research believes that a critical factor will be whether or not Microsoft can differentiate the Zune from competing products in some meaningful way. One differentiator, Zune's Wi-Fi peer-to-peer sharing, which Microsoft is playing up heavily, "isn't all that compelling, at least not now," notes Wilson. "There's a lot more you could do with that capability."

But given the results of ABI Research's survey, Apple will need to make some big announcements in 2007 if it is to maintain its edge in the industry. Says Wilson, "Apple needs a new high-end device that works really well and looks really cool, because other brands are catching up."

The survey results are contained in ABI Research's study, " Microsoft's Zune " (http://www.abiresearch.com/products/research_brief/Consumer_ Electronics_Market_Update/101), which explores what Zune's new features, connectivity with Xbox, and Zune Marketplace mean for Apple, for Rhapsody, or for the PlaysForSure program. It forms part of the Consumer Electronic Research Service (http://www.abiresearch.com/products/service/Consumer_Electronics _Research_Service), which also includes Research Reports, Research Briefs, Market Data, ABI Insights, and analyst inquiry support.

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Methodology: data contained within this report is derived from a Web-based survey among a nationally-balanced and demographically-representative sample of 1,725 online consumers (age 18 and older). The consumer survey was conducted in October 2006. Respondents were provided a photo and description of the Microsoft Zune device before being asked about their likelihood to choose it over a competitive MP3 player.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit www.abiresearch.com, or call +1.516.624.2500.