Microsoft sees Zune effort as a long haul

To catch up with Apple in the music business will cost hundreds of millions of dollars and take years, company says.

REDMOND, Wash.--Microsoft plans to spend hundreds of millions of dollars to catch up to Apple Computer in the music business, but expects the effort to take several years, a top company executive said Thursday.

The software giant plans to have one music player in the U.S. this year, expanding into other devices and regions next year, Robbie Bach, president of the Entertainment and Devices Division at Microsoft, said at the company's financial analysts meeting here.

"We think of this in the hundreds of millions of dollars of investment" over several years, Bach said. "It is something that is going to take time. This is not a six-month initiative."

Microsoft confirmed its plans for its Zune-branded player and service last week, but has offered scant details beyond the fact that it will have a hard drive-based music player with a built-in Wi-Fi connection on the market this year.

The move is a radical departure for the software maker, which has until now tried to take on Apple with a partner approach, in which many devices and services used Microsoft's technology. Although the devices and services were by and large compatible, the experience hasn't been what Microsoft hoped.

Bach said Microsoft is not abandoning its partner-oriented PlaysForSure program, even as it looks to build its rival Zune approach.

"PlaysForSure continues as it is today," he said, addressing a question from analysts. "We're going to continue to support that," he said.

Bach didn't offer new details on Zune but said creating a sense of community and making it easier to find new music are central to it. "We're not just introducing Zune to do the same thing other people do," Bach said. Still, he said, the company expects it to take three to five years for the effort to really pay off.

Zune will tie into other Microsoft efforts, including Xbox, Media Center and the company's Live Anywhere gaming effort, Bach said.

"It enables us to complete the picture," he added.

Bach said the company won't need to invest as much as it did with Xbox; the company needed to significantly subsidize the consoles to compete with Sony. In the music business, though, it is the hardware that is profitable, and the service is not a huge money maker.

That said, catching up to Apple will cost money, he said.

"We have to drive a new brand: Zune," he said. "We have to drive people who think about iPod as the brand to think about other things."

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