updated 01:10 pm EDT, Fri September 15, 2006
iPod pricing surprises MS
Apple's decision to aggressively price its 30GB video iPod at $249 likely took Microsoft by surprise, according to American Technology Research senior analyst Shaw Wu. "We believe Microsoft is re-thinking its pricing strategy amid potential wider losses to stay competitive in the marketplace," Wu said. Microsoft yesterday officially unveiled its Zune player alongside an online store, announcing further details of the portable player's specifications and capabilities. "We remain underwhelmed with the much-hyped Zune, which is essentially a repackaged Toshiba Gigabeat, with limited differentiation vs. existing Windows Media devices," the analyst said. Wu suspects Zune will still see modest success due to Microsoft's vast resources and strong brand name, but at the expense of its Windows Media partners such as Sony, iRiver, and Toshiba. Microsoft also hinted that it is working on a Zune cell phone, following widespread rumors that Apple is placing the finishing touches on its own mobile handset.