11/18/2008, 3:55pm, EST
Tuesday, November 18thMicrosoft dropping Zune prices to edge iPod
Just two months after introducing its third-generation Zune platform, Microsoft is already dropping prices on its flash-based models to improve their competitiveness, the company's Zune marketing director Adam Sohn has confirmed in an interview on Tuesday. The company's largest cut will apply to the outgoing 4GB Zune, which drops $30 to reach $99. Zune 8GB players will drop $10 to $139, while the 16GB player is being slashed by $20 to $179. Americans will see the cuts as of Wednesday, while Canadians will see a similar effect on Friday.
Sohn explains the moves as necessary to protect Microsoft's holiday sales for its lineup. The company has had to adapt to the "realities of the market," he says.
More detail isn't provided, though economic concerns are widely believed to be discouraging strictly luxury-focused purchases such as portable media players.
The cuts are unusual among device makers, which often wait until products are deeper into their launch cycles to lower prices and rekindle demand that may have sagged after release. Apple is understood to have followed similar last-moment pricing strategies itself and was forced to sell a limited number of 4GB iPod nanos in Canada and other non-US countries after deciding to bump the launch capacities to 8GB and 16GB at the last minute, which negated a potential Microsoft advantage.
Microsoft itself has also had little success gaining market share in the US and has often declined to illustrate Zune performance in its quarterly results, instead focusing on the Xbox 360.
Filed under: iPod, industry, audio
Other story tags: Microsoft, Zune
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I Saw One!
I finally saw someone carrying a Zune yesterday. First one I spotted in the wild since the things were released.
Pathetic MS
wow, now that they dropped the price everyone will in the family will get one for xmas! I will rescue MS in one fell swoop...
Because they can
Nice to have that other cash cow product automatically funding money losing products to win the market in the long run. Wear down the competition, we can afford to lose millions to catch up. They can't.
re: Slappy
yea.. think Xbox. As far as I know, that is still losing money.
wait
What's a Zune?
hey slappy
you're wrong. it's not millions, it's billions. last i heard xbox was 6.5 billion in the hole. msn is around a billion. zune might be still in the millions though.
Small
The marketplace for Zune and the other MP3 players is pretty much "Do you hate Apple?"
Thankfully, that's a small number of people (outside corporate IT types and Linux bigots.)
Great price reduction...
I can't wait to start downloading some touch and tilt games from the App Store to my Zune. Oh! Wait a minute... Those games won't work on a Zune, right?
Forget it. A Zune $50 cheaper isn't worth having in place of an iPod Touch.
The Xbox
hasn't been losing money for at least the last 2-3 quarters, ad possibly even over the last year. I know that most people whho read this blog are openly anti-MS, but can we at least be up to date in the last year?
The Xbox is profitable, unlike the PS3.
old facts.
Xbox became profitable almost a year ago. Way to keep up, kids.
Yes, and some people can't afford ipods. God forbid, and may the rot in hell and die a slow death, but some people just don't have $200 to spend on an mp3 player.
One day someone will explain to me why fanboys hate competition. Never been a bad thing... ever.