Microsoft delves further into manufacturing with Zune plant

[Smithy]

SAN FRANCISCO (MarketWatch) -- Microsoft Corp., a colossus built on software, is making a new push in hardware manufacturing by building a factory in China to produce its Zune media player.
The factory will produce a second iteration of the Zune, which has so far failed to impress in its effort to compete with Apple Inc.'s popular iPod.
The second iteration of Zune will include a number of different versions with varying prices and degrees of storage capacity, according to Jason Reindorp, Microsoft's marketing director for Zune, although he declined to offer specifics. Web sites that follow the device have reported rumors that the newest versions of the Zune will be thinner and will include some smaller-capacity Flash-based players, similar to the popular iPod nano.
The original Zune, released in November, was produced using a framework and components provided by Toshiba Corp. Reindorp said the company hopes that by taking a more direct role in manufacturing a second version, it will help the device gain popularity.
"There are definitely some cost efficiencies, but the more important thing from our perspective is the flexibility and control we have in creating a device from scratch and making it down to the last component what we want it to be," he added. Reindorp said Microsoft will be working with a manufacturing partner at the new factory, though it is not naming the firm. But the factory is located in the same city as another plant operated by Flextronics International  which produces Microsoft's Xbox video game console.
Microsoft is also not disclosing the costs and timetable associated with the new factory. The company expects to have devices from the facility available sometime in the fall, Reindorp said.
 

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The cost of building this factory might explain the over $300 million loss in the Entertainment Division last quarter.
Meanwhile, this factory and the new, more efficient designs might allow Microsoft to lower the costs of producing the Zune, and hopefully lead to lower priced Zune's, which will allow Microsoft to compete more effectively with Apple.

[Blackie]

Rock on!

[xxxoom]

this is great news! 

let's hope it's up and running soon!

[thenumberdevil]

Also on WSJ ...

[xxxoom]

so, it does seem... as many have suggested before, that the first zune was sort of just slapped together to have something ready for xmas of 06.

[Cochell]

this one is for the ladies.
http://www.youtube.com/watch?v=2Ji3YIBGcow

[Antonella]

That shows that M$ is very committed to the mp3 market. Apple is doomed.
If the Zune was slapped together and rushed, then I would like more products that are slapped together as well as that.

[Trastan]

Same deal as X-Box vs. X-Box 360: have someone else build it the first time for research and speed, and build it from scratch the second time, knowing exactly what the market wants. Apple's in some serious trouble if all they have to fight back with is a touch screen.

[xxxoom]

yeah. i think that's exactly what microsoft did.

zune360 will probably be light years ahead of zune 1 (and ipod).  or... let's hope so.

Same deal as X-Box vs. X-Box 360: have someone else build it the first time for research and speed, and build it from scratch the second time, knowing exactly what the market wants. Apple's in some serious trouble if all they have to fight back with is a touch screen.

[Trastan]

Hmm, looks like this is incorrect: no new factory is being built.

http://zuneinsider.com/archive/2007/05/15/on-the-factory.aspx

[xxxoom]

i've read several places that a factory is being built... hmm.

[Zunerama Ed.]

I think what Cesar means is that it's a Microsoft *partner* building the factory, not Microsoft itself.

Although Cesar's post indicates it's an existing factory, not a new one, that will produce the new Zunes.

In either case, the hardware (and software, natch) will be designed and controlled by Microsoft, and its manufacturing partner will create the devices. Evidently that partner is Flextronics, who makes Xbox consoles - although Microsoft has not confirmed that.

[xxxoom]

so, basically, an existing factory is being "fitted" to produce zunes.

same diff.  it's good news. 

[AK Water]

That's true the factory is not Microsoft owned.  The factory is being built by another company but that company produces products for Microsoft.  The products are designed by Microsoft and built by this third party company.  This is true for the iPod as well (Hence the "Designed by Apple in California.  Made in China" on the back of them).  The Apple iPod is made by Foxconn, who also makes crappy motherboards.