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Zune to officially sell at a loss to rival iPod

updated 10:30 am EDT, Thu September 28, 2006

Zune Price Official

Microsoft has previously said that it would not let the iPod undercut Zune pricing, even though it has similarly denied that the new iPod's $249 price had caught the Redmond-based company by surprise. The truthfulness of Microsoft's claims was tested today by the company's official announcement of pricing and launch details. The Zune is now slated to ship on November 14th for a price of $249.99, rising only slightly above the price of Apple's 30GB music player despite the addition of an FM radio and WiFi music sharing. Microsoft explained that the price cut meant it would now take a loss on every Zune unit sold in order to gain market adoption. "We had to look at what was in the market and offer a competitive price," says Scott Erickson, the senior director of marketing for the Zune project.

Additionally, pricing in the Zune Marketplace will be similar to the iTunes Store but adopts a points system similar to the Xbox Live Marketplace. Zune owners will buy Microsoft Points rather than pay directly for songs or albums; 80 points will cost $1, while individual songs will be available for 79 points each. Listeners will also have the option of subscribing to a $15 monthly Zune Pass that gives unlimited access to the over 2 million songs expected to be ready for the combined player and store launch.




by MacNN Staff

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