Robbie Bach, president of Microsoft's Entertainment and Devices Division, said that Microsoft's player now had 10 per cent of the mobile hard drive player market, although the device had yet to turn a profit.
"We feel we are on the right track, and that we are engaging with customers, " Bach told the San Francisco Chronicle in a podcast. "I think profit will follow. It is in the near term, it is not something that is far out."
Bach described competing with Apple as "fun " and, while praising its design skills, pointed out that they come at a price. He said there was a "careful plan" for the Zune's future including a range of new models.
Others have been less sanguine on the future of Zune, however. One reviewer predicted "a complete, humiliating failure".
Bach also hinted that Microsoft would not being making a device to counter Apple's iPhone, and that the firm is happy with its current mobile strategy
Bach named RIM as the key competition, while confirming an update of the Zune's Wi-Fi software.
Apple reported iPod sales of 10.55 million for the last quarter, but Microsoft made the million mark in around nine months whereas it took Apple 14 months to reach that figure. The market was then still in its infancy.
Microsoft is planning to release the European version of the Zune before Christmas.
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