Microsoft Is Said to Stop Releasing New Models of the Zune

Microsoft Corp will stop introducing new versions of the Zune music and video player because of tepid demand, letting the company shift its focus to other devices, according to a person familiar with the decision.

Microsoft will concentrate on putting Zune software onto mobile phones, such as those running its Windows operating system, said the person, who declined to be identified because the decision hasn’t been announced. Zune software lets customers buy songs and movies, as well as pay a monthly fee to stream unlimited music.

Zune, introduced in 2006, never managed to break the iPod’s grip on the music-player industry and became the brunt of late- night talk-show jokes. Apple Inc’s iPod led the market with 77 percent of unit sales last year, while the Zune failed to crack the top five, according to NPD Group Inc. By adding the Zune features to the Windows Phone software, Microsoft aims to gain ground in another challenging area -- mobile phones -- where it’s lost market share to Google Inc and Apple.

:story: Full story: Bloomberg