Apple (AAPL) Girds For Another Non-Attack From Microsoft (MSFT) Zune

The Microsoft (MSFT) Zune is as rare as the Studebaker, so Apple (AAPL) has nothing to fear from plans to get more adoption for the portable music device.

According to The Wall Street Journal, Microsoft will debut "a new technology that will let users of its Zune portable devices legally share portions of their song libraries with other Zune users."

The trouble with the plan is that there are no other Zune users. Microsoft has less than 4% of the MP3 market in the US. Redmond also wants to charge $14.99 per month for the service dubbed Microsoft’s Zune Pass. Good luck counting the few hundred dollars a year that Bill Gates will get from the service for his retirement fund.

Microsoft may have trumped Sony’s (SNE) Playstation franchise with its Xbox, and that may have taken the better part of a decade, but Apple’s lead in portable devices is simply too great. Jobs and his minions add a new set of features to the iTunes franchise every month. Most recently it was a the ability for users to access movie downloads and rentals. The iTunes store is the largest music download service in the US and there are something like 140 million iPods worldwide.

Job’s can also count on the growing iPhone franchise to hold off the likes of Microsoft. Redmond’s only chance of catching Apple in phones and music players is to buy Nokia (NOK). Now that the Yahoo! (YHOO) thing has not worked out, that may be a good idea.

Douglas A. McIntyre