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Microsoft matches iPod, iTunes pricing

updated 09:40 am EDT, Thu September 28, 2006

Microsoft matches pricing

Microsoft on Thursday said its forthcoming Zune music player will sell for $249.99 and that songs from its own music service will sell for $0.99, matching the price of Apple's 30GB iPod and iTunes' songs. Because of the aggressive pricing by Apple, the company says it will lose money on its Zune player this holiday season. Microsoft said it needed to put a comparable price on Zune--which launches November 14--even if it meant that the company will suffer a loss from the device's sales this holiday season, according to Reuters: "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 invest hundreds of millions of dollars to develop and market the Zune--which bundles a few more features than Apple's iPod, including FM radio and wireless connectivity between players to beam photos and music. In addition, the company acknowledged the investment "may take years to bear fruit."

by MacNN Staff

(34)

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zerostar
Mac Elite

Joined: Jan 2005

0

09/28, 09:45am | report spam | close Reply |
Warranty?

What will the warranty be like, I think with a 3-year warranty (hey they are willing to loose money anyway) they can seriously hurt the iPod.

Anyone who has shelled out almost $400 for an iPod to have it break in 16-18 months will certainly look at the zune if it has a longer warranty, plus it doesn't look all that bad either!

scrod008
Fresh-Faced Recruit

Joined: Mar 2002

0

09/28, 10:00am | report spam | close Reply |
Warranty?

Who cares about the warranty, do you really think that will make a difference to people? People aren't going to buy this piece of c*** when they can buy the best in the market for the same price, especially when the iPod is as established as it is.

zerostar
Mac Elite

Joined: Jan 2005

0

09/28, 10:04am | report spam | close Reply |
yeah I do

I think that is important to a lot of people, I know it is to me, but I'm not buying a zune unless it is a good performer, widely used and is far more supported on the mac.

And don't forget your comments can be applied to the Xbox vs. the Playstation just as easily, MS has tons of money and can dominate a field if they play their cards right.

e2Sync
Fresh-Faced Recruit

Joined: Feb 2005

0

09/28, 10:07am | report spam | close Reply |
is this car zune ready?

moon ready? no, zune, you know, microsoft zune! ahh, is that some sort of music player? Yes! No.

mosespatrader
Forum Regular

Joined: Jan 2001

0

09/28, 10:08am | report spam | close Reply |
Profitable?

I find it funny that Microsoft can't even be profitable on a device that is based off a Toshiba device.

The iPod has been profitable from day 1!

jarod
Fresh-Faced Recruit

Joined: Apr 2005

0

09/28, 10:09am | report spam | close Reply |
As I've said before

I don't see what the excitement is. There are TONs of iPod competitors (or so called ipod killers) that destroy this piece of s*** from Microsoft and yet they have barely sold anything. People are giving this zune more credit than it's worth. It's no iPod, will never be an iPod, and will always be a cheap, defective, piece of c*** synonymous to Microsoft's reputed level of quality. You have to be really really really stupid to buy something like this (a repackaged OLD product).

milhouse
Senior User

Joined: Jan 2001

0

09/28, 10:11am | report spam | close Reply |
PC users?

I think they will initially sway some existing PC based iPod users as well as current non-iPod PC users who aren't parital to Apple. If the product is stellar, the'll gain inroads. If not, it will be an expensive also-ran.

Is Zune Mac compatible? If not, they won't hurt the Mac-wielding Ipodder base.

bfalchuk
Fresh-Faced Recruit

Joined: Jul 2003

0

09/28, 10:22am | report spam | close Reply |
I disagree

I can't see buying a Zune even if my iPod broke. I'd just buy a new iPod.

Many players have come to challenege the iPod with more features, and they all failed, including the Gigabeat, on which the Zune is based.

I will admit, there are some nice ideas in the Zune, like being able to send your library via wi-fi. However, it all depends on MS selling enough Zunes that the feature becomes relevant. Your friends really must have Zunes for it to make any difference. And the battery life will be worthless if you're using the feature. Between the wireless and the HD spinning, you'll be using more battery than driving video, probably.

Good idea, but it just won't be relevant, and without that feature, the Zune is just another challenger that won't make it.

kerryb
Fresh-Faced Recruit

Joined: Aug 2001

0

09/28, 10:53am | report spam | close Reply |
Zune vs share holders

M$ may have tons of money but they also have stock holders. How many "long term" money losing plans can M$ try until people ask them to create a new market instead of trying to smother competition with endless resources?

exca1ibur
Mac Elite

Joined: Oct 2000

0

09/28, 10:58am | report spam | close Reply |
No Mac compatibility

The Zune is NOT Mac compatible and neither is their music store. So its not an option for a Mac user either way.

John Lockwood
Fresh-Faced Recruit

Joined: Mar 2000

0

09/28, 11:11am | report spam | close Reply |
New Arms Race?

The current competition between Apple and Microsoft increasingly reminds me of the Arms Race between the US and the USSR (as it was then) during the height of the cold war.

Some people put the break-up of the USSR down to being bankrupted trying to keep up with the pace (and cost) of arms development led by the USA with Ronald Reagan's "Star Wars" missile shield the final straw that broke the camels back.

Microsoft are currently loosing significant sums of money with XBox in their fight against Sony, and now Microsoft are going to loose even more money fighting Apple and the iPod. Microsoft have already spent a shed load of money developing Vista (arguably fighting Apple's Mac OS X), an upgrade that a lot of people and businesses are completely unexcited about and uninterested in buying.

If Microsoft keep wasting money this way, even as big a company as they are will eventually run out of cash and thereby 'loose the war'.

awcopus
Mac Elite

Joined: Nov 2001

0

09/28, 11:39am | report spam | close Reply |
competition is good

Only helps customers to have as much competition as possible.

****

Mr. Lockwood, you mean to use the word "lose" not loose.

Chokse
Fresh-Faced Recruit

Joined: Sep 2006

0

09/28, 11:48am | report spam | close Reply |
Grammar check

"Loose" means 'not tight'. "Lose" means 'to not win'. Some folks out there need to take an English refresher course!

Feynman
Forum Regular

Joined: Aug 2006

0

09/28, 12:29pm | report spam | close Reply |
RE: Grammar check

In this casem both can be said for MS.

RickVanderveer
Fresh-Faced Recruit

Joined: Jul 2006

0

09/28, 12:43pm | report spam | close Reply |
answering to stock holder

In the responses regarding answering to stock holders: Let's not forget that Microsoft was perfectly willing to loose money on every sale of the original Xbox to buy their way into the video game market. This is exactly what they're trying again in the online music market.

I for one don't think it's too smart to be all that smug that they will fail.

lockhartt
Fresh-Faced Recruit

Joined: Apr 2000

0

09/28, 02:02pm | report spam | close Reply |
xbox?

Don't understand references to the XBox as MS willingness to lose money to establish dominant marketshare.

Last time I checked, PlayStation consoles still held marketshare dominance and XBox is STILL not profitable.

Will Zune pick up some of the MP3 player market? ...sure. Will it dominate? ...not unless Apple does something really stupid.

Also surprised to hear anyone call the Zune anything other than butt-ugly :)

malax
Fresh-Faced Recruit

Joined: Aug 2006

0

09/28, 02:26pm | report spam | close Reply |
getting in backwards

It's ok if game console sell for a loss because the real money is in the games themselves (and the license fees). That doesn't hold up for a music player. Apple got this right. Apple doesn't give away iPods to get people to shop at the iTS; the iTS is a way to sell iPods.

MS seems to follow the old principle of "we lose money on every sale, but we make up for it in volume." That doesn't work unless you manage to destroy the competition so you can then switch to monopolistic (i.e., higher) pricing.

malax
Fresh-Faced Recruit

Joined: Aug 2006

0

09/28, 02:35pm | report spam | close Reply |
how to complicate "a buck

Read the linked article. Microsoft won't be selling songs for $.99. They'll be selling them for "79 Microsoft points" which can be purchased at a rate of 80 points for a dollar. What genius came up with that scheme? "Let's make our own virtual currency with an obscure exchange rate so people feel like they're on vacation in some foreign country. You know people are freer with their money when they're vacationing!"

Terrin
Fresh-Faced Recruit

Joined: Jan 2006

0

09/28, 02:54pm | report spam | close Reply |
Sad days

If I was going to buy buy an iPod competitor, it certainly would not be a Zune. I would go for one made by Creative. At least Creative, is somewhat Creative. Creative has 1) a nice interface, and 2) some well designed players.

The only reason SanDisk is the number one seller behind Apple is that it manufactures the flash drives, and can under cut the competition on wholesale price. This lets places like Walmart to keep more profits, and in turn give Sandisk more retail space.

Microsoft likely will make some inroads just because of its marketing abilites.

ronjamin
Baninated

Joined: May 2002

0

09/28, 03:05pm | report spam | close Reply |
Windows all over Again

NOT

Anything you see made from Microsoft, with the exception of maybe their mice, is pretty much behind the curve in design and customer friendliness.

marcuscorder

Joined:

0

09/28, 03:21pm | report spam | close Reply | delete
RE: grammar check

Actually, "lose" means "not to win." If you're going to argue about grammar, don't split your infinitives. :)

mthomes
Fresh-Faced Recruit

Joined: Aug 2006

0

09/28, 03:37pm | report spam | close Reply |
lol

Every time I read about the Zune I can't help but laugh a little inside. It's funny to watch Microsoft continually try and buy their way into a market. So it costs M$ a little more to have the Wifi and FM feature? A nice idea i guess. I don't know how much the beaming of songs will really be used, but I guess it's hard to speculate this early.

So they have these features built in. Yay! Good for M$. So they have some "out of the box" features that the iPod doesn't, but what about accessories? Accessories is where Apple has been killing other players as well. A friend of mine was going to back and forth between an iPod and another brand (I think creative). The decision came down to accessories. There is a crazy amount of Made for iPod accessories out there and very little for other players. That may be the deciding factor for a lot of people.

I'm not going to say that what M$ is doing is bad because this will only make Apple innovate harder. Competition is always great for us.

Deal
Mac Enthusiast

Joined: Apr 2001

0

09/28, 04:06pm | report spam | close Reply |
One of these days...

Microsoft will one day have too many losing ventures, and when it overtakes the income of their insane Windows licensing, they will slip far and fast indeed.

Layoffs at Microsoft will not happen fast enough to keep up with the red ink.

tick, tick, tick, tick...

psdenno
Fresh-Faced Recruit

Joined: May 2003

0

09/28, 04:51pm | report spam | close Reply |
Too Little, Too Zune

The good news for Microsoft is that they won't sell many, so they won't lose much.

unclelar
Fresh-Faced Recruit

Joined: Feb 2006

0

09/28, 05:08pm | report spam | close Reply |
Who cares?

I will just keep using my old 2G 10 gig iPod until it fails (if it ever does). Then maybe, get another of whatever is the best apple has to offer at the time.

climacs
Fresh-Faced Recruit

Joined: Sep 2001

0

09/28, 06:51pm | report spam | close Reply |
if you want

your kid to get beat up at school, buy him a Zune this Christmas (Zune? what kind of name is that?)

chotty
Fresh-Faced Recruit

Joined: Jan 2003

0

09/28, 09:16pm | report spam | close Reply |
Why, M$, Why?!

WHY do they feel they HAVE TO even make this POS? How about trying to come up with an ORIGINAL IDEA? ... Just one... anything... 'Some real "Trailblazing" there, Mr. Balmer!

benhur
Fresh-Faced Recruit

Joined: Jan 2001

0

09/29, 01:10pm | report spam | close Reply |
apple should be scared

There's a very good article at: http://feeds.macworld.com/~r/macworld/all/~3/29537543/index.php

I happen to agree with him. When the first news broke of the zune I thought of all the potential it had with MS claws in everything from their Windows marketshare to the Xbox 360. The article points out other things I had not thought of.

I love Apple and have 3 iPods but the innovation is lacking in the iPod. Their too focused on the iTunes store. If Apple isn't scared (and all the Apple "faithful" here) then you should be.

Let's hope Apple sees the big picture because iTV and a brighter screen is not it.

pimpmymac
Fresh-Faced Recruit

Joined: Sep 2006

0

09/29, 04:17pm | report spam | close Reply |
'is' Mac compatible

either by way of Boot Camp or Parallels, Mac can connect to Zune Marketplace and the Zune player.

I am NOT condoning such silliness, but it will be possible.

pimpmymac
Fresh-Faced Recruit

Joined: Sep 2006

0

09/29, 04:49pm | report spam | close Reply |
clear as mud

it may be a bit unfair to discuss such ideas here, in an Apple-centric forum. A much greater audience would yield a decidely better debate. If you are uncomfortable hearing the alternate opinion, then you don't deserve to have one of your own.

at any rate...

-Zune = catchy name -Points pricing policy = stoopidiculous, reminds me of frequent flyer miles -$15/month "buffet" subscription = watch out for this one, Steve. With folks paying $5-15/mo for Sat radio, $60/mo for cable/sat, $60/mo for cell and $15/mo for movie rentals, this is easily affordable and attractive to the buy-now/pay-later generation. DRM be damned, the age group that buys the bulk of music online does not care how many "years" they get to listen to it. Remember when you were Goth at 15 and Punk at 16? - wi-fi and 3-plays/3-days - um, yeah, huh? - releasing a bloated player just before the Holidays - smart, if they plan to use this experiment to learn what the public really wants. Lessons of hard knocks is a great tool when entering a market and you have capital to burn. - the MS name - while Appletists aren't the only ones to shun MS products, we certainly are a minority. In corporate culture, the PC is king and will be for quite some time. This breeds a notion of laziness when it comes to personal choice for home use. It's the computer-world's "easy button". For the older (richer) generation, getting folks to embrace Apple, after it's ups and downs, is a very steady uphill climb - functionality and coolness be damned. And, the more the Mac becomes like the PC, the less the reason to side-grade. True for the music player market as well. - relationships - we'll have to wait and see how the music, tv and movie industries warm up to MS's venture. Would you all really be surprised if Wal-mart pricing of the player and MS clout over Hollywood were to cripple the iTMS offerings? Have any of you ever seen a marketing population map and how those concentrations of consumers for various products are placed? iPod's reach is not as nationwide as you might think. And, there are plenty of customers out there who have not made a music player decision yet.

enough rambling, eh...

davidwb
Fresh-Faced Recruit

Joined: Oct 2005

0

09/29, 05:52pm | report spam | close Reply |
Zune gone

Losing money on a game machine makes sense because Microsoft makes money on every game sold and quickly recoops it. But there isn't enough markup on music to make up a loss on the Zune. Zune is going to hurt Microsoft's urstwhile Plays For Sure partners and could well be just another nail driven into the heart of the company. Who can trust the company when again and again it stabs its partners in the back?

smashedbanana
Fresh-Faced Recruit

Joined: Jun 2005

0

10/01, 01:03pm | report spam | close Reply |
Cool but...

I like it, and I agree healthy competition is good. But with M$ they always hit hard and hit for the jugular. They don't care about design or innovation (they take from other people), these are just means (along with loads of cash) to achieve the #1 spot.

I would worry about buying this thing and in 2 years they decide the MP3 player market isn't profitable or that things have shifted to cellphones or whatnot ... (basically an excuse for not being #1)leaving me the buyer in the dark with no support and a product that was good in the context of what WAS available.

I will count on Apple to continue to progressively innovate and make my iPod more and more useful.

resuna
Fresh-Faced Recruit

Joined: Jan 2005

0

10/02, 02:04pm | report spam | close Reply |
don't believe them

I do not believe Microsoft is losing money on the Zune. Apple's prices are higher than Windows-powered devices with similar hardware, not to mention the innumerable Windows-compatible players. Microsoft's costs are no higher, especially since they didn't develop the hardware.

They're just talking the price up so they can justify a price rise in a year if it does take off, and to establish an exit strategy if it doesn't.

Strupat
Registered User

Joined: May 2002

0

10/04, 09:41am | report spam | close Reply |
No Mac compatibility

Micrsoft is probably not worried about the Mac market. It is small and not worth the effort at this point in time. How do any of you know it is a "piece of c***"? It is planned to be linked with XBox Live and eventually evolve to a gaming device.

They plan to put tons of money into it and personally I think they will give Apple a run for their money.

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Microsoft matches iPod, iTunes pricing

updated 09:40 am EDT, Thu September 28, 2006

Microsoft matches pricing

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