Microsoft says Zune to sell for $249

Posted:
in iPod + iTunes + AppleTV edited January 2014
Microsoft Corp said Thursday its Zune digital media player will be sold at relatively the same price as Apple Computer's new 30GB video-enabled iPod and admitted that it will lose money on each sale as a result.



The Zune, which also comes with 30GB of storage, will retail for $249.99 (about 99 cents more than the iPod) when it goes on sale Nov. 14. Songs available for download at the Zune Marketplace service will cost about 99 cents a song, on par with prices at Apple's iTunes, Microsoft told Reuters.



The Redmond, Wash.-based software maker also told the media outlet that it needed to put a comparable price on Zune, even if it meant suffering a loss from the device's sales this holiday season.



"We had to look at what was in the market and offer a competitive price," said Scott Erickson, Microsoft's senior director of product marketing for Zune. "We're not going to be profitable this holiday but the Zune project is a multiyear strategy."



Microsoft has said it plans to spend hundreds of millions of dollars over the course of the next several years in a bid to catch Apple's iPod.



The Zune player is the first step in creating a new brand of portable devices, the company has said, adding that a Zune phone is also in the works.
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Comments

  • Reply 1 of 174
    If they are losing money as it is.. why not then go the full step and undercut the price of the ipod, instead of selling at the same price?
  • Reply 2 of 174
    In-fucking-credible. Is there an MS product that isn't a loss-leader besides Windows and Office? I can't believe MS is still racking in the cash every quarter with so many loss-leaders.



    Consumers should be kissing Apple's and Nintendo's collective asses for making Sony and MS sell their products cheaper than they can make them.



    It's just sad that MS and Sony are trying to grab market share by throwing money at the problem.
  • Reply 3 of 174
    The Xbox unit has lost billions. I full expect this to be the same, and to do more to cannibalize WMA player sales than to affect the iPod sales. Apple has managed to "sell cool" with the iPod, and it's not very easy to affect the selling of cool unless you are cool yourself. MS is not cool.
  • Reply 4 of 174
    The business model doesn't quite make sense to me... PS/PS2/PS3 and X-Box can soundly afford to be loss-leaders (sorta), because even if Sony and MS lose money for each unit of hardware they sell, they can make money selling software and through licensing to 3rd party software vendors.



    What's the equivalent of software to the Zune? Music that they'll sell for 99 cents?



    Last I heard, Apple was barely breaking even with music sold through iTMS. Apple's business model works ONLY because they rake in the money through hardware sales.



    So let me get this straight. MS loses money on each Zune they sell. They will also only break even, if not lose money, on each song they sell through their service.





    Sniff-sniff... do I smell failure in the air?
  • Reply 5 of 174
    It would be funny if Apple dropped their prices again to $229/$329. It wouldn't accomplish anything other than pissing M$ off, so it's not going to happen.



    Note that I think that Apple ought not to do something like this because then M$ might try to claim that Apple can sell for a lower price because they have a lower quality player than Zune. None of us would believe it, but what about everyone else?
  • Reply 6 of 174
    Quote:
    Originally Posted by rawhead


    So let me get this straight. MS loses money on each Zune they sell. They will also only break even, if not lose money, on each song they sell through their service.





    Sniff-sniff... do I smell failure in the air?



    Perhaps it's the smell of a share-holder's revolt when they realise that there is no profitability anywhere to be found?
  • Reply 7 of 174
    Jesus wept!



    What a screamingly horrible bit of crap this zune thing is!



    How can any company seriously think that sending this thing out to fight the Goliath that is iPod has any chance of success?



    Honestly, who here thinks M$ just set themselves up for one giant kick in the nuts when Apple release the updated, real video iPod - that does everything the zune chunk does and more, sells for less and is waaaaaay cooler to own?



    And M$ are releasing a zune phone? HA HA HA HA! Hang on a second, I think I'm gonna vomit from laughing too hard... I can just imagine the phone thing they'll release: no signal strength, 30 minute talk time, at least 2 security updates a week and it'll hang up on you when you least expect it. That and the fact that it'll only be available in 'avocado'.



    These clowns just can't get anything right. It's gotten to the point where I'm thinking that Apple secretly bought out M$ a couple of years ago and are deliberately making crap products to make Apple look good!



    Let's recap the zune hi-points:



    It's available in brown.

    It's got wi-fi so it's battery life will suck.

    It's larger than the same capacity iPod.

    It's only available for PC

    They'll lose money on every unit sold.



    In short, they're making a bad product and selling it at a loss?



    Brilliant.
  • Reply 8 of 174
    Apple = good, M$ = evil, right? If apple is seeing mac sales going up because of the iPod 'halo' effect does that mean the zune could see increased sales from the xbox 'horny' effect?
  • Reply 9 of 174
    What I don't understand is how does Apple make so much money on this but Microsoft can't?
  • Reply 10 of 174
    boogabooga Posts: 1,077member
    Quote:
    Originally Posted by uyman


    What I don't understand is how does Apple make so much money on this but Microsoft can't?



    Volume. Apple buys things in quantities with multi-year contracts that Microsoft can't (yet) match. That's why Microsoft thinks they can still pull this off... the theory is that once they get the volume up, the costs will decrease to the point where they break even. Of course, it hasn't worked with the XBox and that has hugely profitable game licenses behind it, so I personally think they're on crack and wouldn't want to own any MSFT stock just now.
  • Reply 11 of 174
    The only thing I would fear from any potential "iPod killer" would be a dramatically lower price. Now that we know that Zune costs the same as an iPod, what would motivate a consumer to ditch the best device in the field?



    <sarcasm>Microsoft has a rich history of making technology friendly to the consumer.</sarcasm>
  • Reply 12 of 174
    lol i thought this might happen, well, i knew this would happen. they copy the concept, they copy the features and they copy the price. the only thing they cant copy is success.
  • Reply 13 of 174
    Apple can afford to drop their prices down to

    $199 for the 30gb iPod

    $249 for the 80gb iPod

    $299 for coming Video iPod



    Those prices are high enough for the product not to be seen as a commodity, but low enough to kill Microsoft's Zune initiative.



    Though Apple has a more successful product now, Microsoft can afford to lose billions for years to come in hopes of dominating this space in the future ex. xbox.



    Apple can't afford to lose ground here.
  • Reply 14 of 174
    zune phone.













    lol.
  • Reply 15 of 174
    When Nintendo created the Game Cube keeping the production cost down was central during the whole process, which made them a successful company, earning money on every sold machine from day one. This is probably true for the Wii as well. I don't know how much money Apple earns on each iPod, but I guess they have a great deal of a gap to lower their prices and still be profitable should they want/need to. I think Apple by now has managed to tout everyones mind with the Apple seal of quality. Mac owners, and probably now iPod owners are prepared to pay more for the Apple experience.



    Microsoft is probably gonna try hard, and they'll probably stir the market if they manage to keep up for the number of years required.
  • Reply 16 of 174
    I enjoy bashing MS when they do stupid things just as much as the next guy but I try to do it without quite as much biased. Let me counter some of your points:



    Brown - It may not be attractive to you but it atleast is something different. If you were looking for a white mp3 player would you choose the ipod or the zune? Same for black, but if you 'really' wanted a brown one then the zune is the player of choice. I'm sure they did some research and found that it might look nicer for people with retro components sitting on a bookshelf.



    Wifi - It only enables Wifi when you are using it to transfer songs between zune players. So battery life is not a factor if you aren't using the feature. I personally doubt I would use it much but it would be nice to have since there is no downside for those times when you aren't using it.



    Larger - I haven't seen one in person but the size seems comparable considering the increase in screen size. That said - I would bet that Apple's true video ipod will still be as sleek as the current ipods yet have the bigger screen.



    PC Only - I doubt they feel like they would miss out on any sales from Mac and Linux users so is this really going to impact the sales for the zune?



    Am I interested in a zune? No. But that doesn't mean it will fail.



    Quote:
    Originally Posted by deckard


    Let's recap the zune hi-points:



    It's available in brown.

    It's got wi-fi so it's battery life will suck.

    It's larger than the same capacity iPod.

    It's only available for PC

    They'll lose money on every unit sold.



    In short, they're making a bad product and selling it at a loss?



    Brilliant.



  • Reply 17 of 174
    IMHO, MS is going to get raked by Apple for the next couple years at least, between this little ingenius price war that Steve started, the vPod, and the iPhone. It almost seems like Apple's saying, "come on - compete with us. we dare you!"



    They've got a lot of catch-up work to do. Xbox 360 shows their capability to do exactly that, but sometimes I wonder if MS realizes it's not the 1900's anymore, and that they're up against a totally new Apple that has mastered its market - at least for now.
  • Reply 18 of 174
    Quote:
    Originally Posted by kim kap sol


    Is there an MS product that isn't a loss-leader besides Windows and Office? I can't believe MS is still racking in the cash every quarter with so many loss-leaders.



    It seems as though Microsoft (a software company) has some trouble being profitable in their hardware efforts. This situation is (retardedly) exacerbated by the fact that the Zune is not even made by Microsoft, it's a Toshiba product. Are they buying these things from Toshiba for more than they sell them for?
  • Reply 19 of 174
    Fantastic post. Thanks for making me laugh.





    Quote:
    Originally Posted by deckard


    Jesus wept!



    What a screamingly horrible bit of crap this zune thing is!



    How can any company seriously think that sending this thing out to fight the Goliath that is iPod has any chance of success?



    Honestly, who here thinks M$ just set themselves up for one giant kick in the nuts when Apple release the updated, real video iPod - that does everything the zune chunk does and more, sells for less and is waaaaaay cooler to own?



  • Reply 20 of 174
    zune phone, wow



    btw:





    apple is TEH DOOMED!!! lol..



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