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Tuesday, November 28, 2006, 07:00 am PT (10:00 am ET)

PiperJaffray: some retail clerks 'never heard of' Zune

A recent survey of consumer electronics retail stores conducted by PiperJaffray reveals that salespeople are recommending Microsoft Corp's Zune digital media player just 8 percent of the time.

In a research note distributed Tuesday, analyst Gene Munster said the 40-store survey found that clerks only recommended the Zune 8 percent of the time, while they recommended the iPod 75 percent of the time.

"In fact, some MP3 player salespeople had not even heard of the Zune, despite the fact that they sold it in their store," he wrote.

Munster said Microsoft appears to be targeting its Zune advertising campaign towards trend-setting teenagers, placing ads in magazines like Rolling Stone and Esquire in order to reach the target audience.

His checks show that Zune ads are also being placed more selectively than iPod ads, noting that among weekend holiday ads from three big-box retailers — Target, Circuit City, and BestBuy — only one showed a Zune while all three had iPod ads.

"These checks are in-line with our thesis that the Zune is off to a slow start; from sales perspective as well as the marketing perspective," he wrote.

PJ Zune/iPod Retail Survey Results


Similarly, Munster noted that during the week of its launch, Zune held the 7th spot on Amazon's top 10 best-selling MP3 players list but has since slid down the rankings.

"The buzz that Microsoft was able to generate for the Zune's launch clearly helped the player in its first week, but much of the publicity took the form of Zune/iPod comparisons," he told clients.

PJ Zune/iPod Retail Survey Results


Also recommended more often than the Zune were digital media players from SanDisk, which garnered praise from approximately 10 percent of salespeople surveyed by Munster. Digital media players from Creative and Samsung followed with 5 percent and 3 percent of the recommendations, respectively.

"I've never heard of the Zune," one digital media player salesperson reportedly told the analyst. Another asked, "Who makes that (the Zune)?"