Zune Drops From 2nd to 5th In Second Week Of Sales

Zune, Microsoft Corp.'s (MSFT) answer to Apple Computer Corp.'s (AAPL) iPod, fell to fifth place from second among competitors in the U.S. market for digital media players, according to figures from NPD Group Inc., a New York marketing firm.

Stephen Baker, an NPD analyst, said Microsoft had a 2.1% share of the market for the week ended Nov. 25, which was also the week of Thanksgiving and the second week Zune was available to consumers.

"That's a difficult week to be in the midst of a product launch, so they've done OK so far," Baker said in an interview.

Baker said many companies have a lot of promotions and aggressive pricing during Thanksgiving week, but Microsoft didn't want to get into that.

"Their share went down, but sales for second week of the product being out went well," he said.

Unit volume was the same for both weeks, Baker said.

"Typically, you see a drop in the first week of product production," he said.

While Microsoft is establishing a presence in the market, it has a long way to go to touch the iPod.

Apple's iPod continued to lead the market with a 39.4% share, followed by SanDisk Inc. (SNDK), which had a 39.3% share.

The two leaders were followed by Creative Technology Ltd. and Memorex in the rankings, with Microsoft tied for fifth with Walt Disney Co. (DIS), Baker said.

-By Paula L. Stepankowsky, Dow Jones Newswires, 360-636-2008; paula.stepankowsky@dowjones.com