00:33 AM

11.14.06: Ballmer: Zune will morph into video-sharing phone, but if its tech against style, Jobs will win every time.

Bloomberg reports that Microsoft's Zune will eventually share videos wirelessly and hook onto a cellphone somehow, Steve Balllmer said.

Ballmer apparently sees the video function as a YouTube kinda function, with customers sharing user-created video. Microsoft is promoting Zune's wireless functionality for music sharing. It uses 802.11 for wireless transfer between Zune's but doesn't support Internet access. Under the terms, a user can play a received song three times before having to buy it. One problem is that, without Internet access you can't instantly buy the song from Microsoft's site. You'd have to go online from a PC to make the purchase and then transfer that file to your Zune.

Steve Jobs dissed the wireless functionality (and showed he understands the iPod demographic) in an interview with BusinessWeek:

I’ve seen the demonstrations on the Internet about how you can find another person using a Zune and give them a song they can play three times. It takes forever. By the time you’ve gone through all that, the girl’s got up and left! You’re much better off to take one of your earbuds out and put it in her ear. Then you’re connected with about two feet of headphone cable.

(At 37 Signals, Jason pegs the subtext of the line, showing Jobs is a master of postmodern messaging. "With a subtle style all his own he’s saying Microsoft = Cold tech and Apple = Humanity. MS scares her away, Apple gets the girl. That’s a sharp, clear, and powerful distinction. Whether it’s true is up to the customer, but Jobs understands how to bait the hook like few others.")

Zune goes on sale today for $249.99. ``The race is on,'' Ballmer said. ``I'm confident we can keep up. They have brand and image going for them, and we have some innovative ideas.''

It's true, iPods are light on functionality. No connectivity, no radio, no recorder. But as the Jobs quote above shows, Microsoft should not underestimate the power of brand and image.