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."