Microsoft "committed" to the Zune despite plunging sales

If cats have nine lives, the Zune must be on its tenth or eleventh by now. Latest example: Zune revenue took a 54 percent swan dive last quarter, yet Microsoft—which is in the midst of slashing 5,000 jobs, mind you—seems determined to keep its stalled MP3 player around.

PaidContent.org dug up Microsoft's latest quarterly filings and found that Zune revenue plummeted $100 milllion—a devastating 54 percent drop "reflecting a decrease in device sales," according to the company's 10-Q filing.

As PaidContent notes, dismal numbers like those—in times like these—are usually the harbingers of doom, especially given the news that Microsoft will shed 5,000 jobs after missing its numbers last quarter.

But don’t count the Zune out just yet. Microsoft spokesman Adam Sohn told PaidContent that despite its deep dip in sales, the Zune isn't going anywhere: "We are in this business for the long term and committed to it," Sohn said, emphasizing (again) that Microsoft has "a broader vision than just selling MP3 players ... we are thinking about more connected entertainment experiences driven by the Zune software and services for not only Zune device owners but other 'tuners' as well."

Interesting, but despite tantalizing promises of bringing the Zune software to "other 'tunes'" (such as, say, a Windows Mobile smartphone), Microsoft's Zune business seems to be stuck in the mud, with no real announcements at CES and no interesting products—rumored or otherwise—in the hardware pipeline.

As a product, I still think the Zune has promise—it boasts an easy, intuitive interface, and it bests the iPod with its ability to update its music, podcast, and video library automatically, over Wi-Fi—but it need a shot in the arm, pronto. A Zune client of cell phones would be a great start, as well as support for Xbox Live movie rentals. And how about putting the Zune Marketplace on the Xbox?

Short of innovations like those, though, the Zune—despite Microsoft's claims to the contrary—appears to be living on borrowed time.

Related:
Microsoft’s Zune: $100 Million Sales Drop Plus Layoffs Equals Questions [PaidContent.org]