We Haven’t Seen the Last of Zune, Nor Its Marketplace

image Emil Protalinski asks today at Ars Technica: “… is there room for a Zune in a post-Windows Phone 7 world?

Remember when Microsoft unveiled the successor to Windows Mobile and said that every Windows Phone 7 will be a Zune? The consequences of that decision for Zune as a platform and for future devices are starting to pile up as we draw closer to release.

We have (thanks to the tireless coverage by Paul and Steven at our partner site for Microsoft coverage, WinExtra) seen pretty convincingly that the Windows Phone 7 platform is going to be hard to ignore, and fairly cool if you’re a gamer.

So assuming that Windows Phone 7 makes as big of a splash as we think it will, the question is valid.

Microsoft does reportedly considering at least one Zune HD device, has a version two in development, and further devices rumored but unannounced.

I talked to Steven Hodson about it earlier today to get his take.

“There could be but they would have to do some major changing of the backend for Zune as their marketplace (ZunePass) is a different beast than both Xbox Live and the supposed Windows Phone 7 marketplace,” said Steven. “Zune may end up becoming less of a hardware and more entertainment platform.”

That certainly jives with my feelings on the matter as well. The best success to come out of the whole Zune project was announced earlier this year when Microsoft let slip that nearly 2% of their yearly revenue comes from the Zune marketplace via the XBox Live. The high penetration of the XBox 360 into people’s lives show that owning sales channel, rather than the end point, is the most important piece of the puzzle.

“In essence, Microsoft is building an ecosystem both on the macro level (in the same way that iTunes is building a media consumption ecosystem), as well as driving the need for people to keep a home private/public cloud structure. If you’re into collecting movies, TV shows, music and other media with your XBox as any part of that, the need will arise at some point for you to maintain a home media server (something that, quite famously, effortlessly integrates with other Microsoft-based devices).”

Steven also went on to say, today, that “the rumor’s I’m picking up are that there will be another Zune HD. It will be floated to see if they can improve market share, but it won’t come until 2011 Q2 in my estimation.”

The launches are put off far enough out that they’ll be incidental to the successes (or failures) of the Windows Phone 7 platform. If Windows Phone 7 is a success, even if not to the level of the XBox Live Marketplace (which of course is tied into the Zune marketplace), will still drive ancillary demand for more Zune devices.

In other words, Microsoft will cautiously assume a wait and see attitude with the Zune devices, but given their failure to give up on the line up to this point (particularly in the face of horribly vicious reviews), I doubt we’ve seen anything close to the end of line for the product.