Despite the most hyped MP3 player launch of the year, sales of Microsoft's Zune came back to earth the week after it launched, according to new research data. But Microsoft says it is comfortable with the pace of sale so far and that it expects to sell more than 1 million Zune players by the end of June 2007.

iPod vs. Zune

Buzz surrounding Zune's November 14 launch, which included several all-star concerts, propelled the player to a debut in the No. 2 market share for its first week, according to NPD Group data for the week that ended November 18. Zune grabbed 9 percent of the market for the week, topping SanDisk, which has held the No. 2 spot behind Apple's dominating market share of more than 75 percent for most of the year.

But the Zune's share tumbled the following week, which included the post-Thanksgiving unofficial kickoff to the holiday shopping season. Zune dropped to a tie with Disney for fifth in market share at 2.1 percent. With SanDisk offering a whopping 50 percent discount in some cases on its players, the company surged ahead of Zune.

But NPD Group analyst Steve Baker said the beginning of the holiday shopping season, complete with its huge discounts and in-store promotions, is a difficult period from which to measure Zune's potential.

"Thanksgiving week is always a bit of an anomalous week," Baker told MP3.com. "People sell products for major price discounts, and SanDisk was very aggressive this year in selling their new Rhapsody player. In fact, Zune sold about the same number of units in the second week as in the first week, but its share of the total market dropped."

SanDisk reaped the rewards of its aggressive promotion. NPD research put SanDisk's market share for the week ended November 25 at 39.3 percent, just one-tenth of a percentage point behind Apple. Baker emphasized the anomaly, particularly given SanDisk's partnership with retailing giant Best Buy, and said he expected Apple's market share to continue at above 75 percent, where it has been for all of 2006.

Zune, in three colors.

The Zune won't be cutting into the iPod's market share any time soon, he said.

"The Zune will be taking share from the other Windows Media-based players, that's for sure," he said.

Jason Reindorp, marketing director for Zune at Microsoft, told CNET's News.com that his company has a realistic view of early Zune sales and will be patient.

"We're forecasting just over 1 million units for the fiscal year," said. "We feel pretty good about that number. We think a lot of Zunes are sitting underneath Christmas trees."