In an aim to help Microsoft make a head start with its upcoming Zune music player, Microsoft decided to set the retail price of the Zune to $249.99 to closely match the 30GB iPod. As a result, Microsoft will be making a loss on the sales of its players this coming holiday season, but aims to recover the costs over the next couple of years, since the Zune project's strategy will run for several years. According to an analyst from the JupiterKagan Inc. media research firm, Microsoft will be competing on features rather than price, but needed to set a comparable price to its rival to start with.
Microsoft also plans to invest hundreds of millions of dollars in developing and marketing the player and Zune brand and will aim to attract consumers with the player's limited wireless song and photo sharing capabilities. They are also working on a Zune mobile phone, but there is no further information about the phone is available at this time.
Like Napster, Microsoft will allow consumers to download an unlimited number of songs for a flat $14.99 monthly subscription or buy songs individually using a Microsoft points based system. 80 Microsoft points can be purchased for $1 and each track costs 79 Microsoft points. They aim to launch with a library of at least 2 million songs for its November 14th launch, however no video content will be available initially for the launch. Thanks to yronnen for letting us know about the following news:
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Microsoft's 30-gigabyte Zune will retail for $249.99 (133 pounds) -- 99 cents higher than the iPod with the same amount of storage -- when it goes on sale November 14. Songs available for download at the Zune Marketplace service will cost about 99 cents a song, on par with prices at Apple's iTunes, Microsoft said. The world's largest software maker faces an uphill climb in trying to topple the popular iPod after conceding a five-year head start to Apple's media player. The Zune aims to compete on features, not price, said an analyst. "They're not getting into a pricing war," said Michael Gartenberg, an analyst at technology and media research firm JupiterKagan Inc. The full article can be read here. |
Even if the Zune offers all the features of the iPod, Microsoft will definitely need to have good reasons for people to give up their iPod to buy a Zune instead. In my opinion, the sharing feature is unlikely going to a big hit unless consumers are not as restricted with the music they receive from someone else.
It is a real pity to see Microsoft using a new DRM system just to make its upcoming Zune player incompatible with its existing PlaysForSure DRM system, despite both the Zune and PlaysForSure using the same audio codec's. What Microsoft is effectively doing is the equivalent of a new high street music shop selling CDs with a non-standard centre designed to not work in regular CD players and selling portable CD players with spindles specifically designed to only fit the centres of these CDs, such that any consumers who buy this shop's CD players can only ever buy music CDs from that shop to play in their player, even though the CDs are technically the same as regular CDs besides the middle.
yronnen added: I really love it when there is not a real price competition and instead they compete with "features". It's great for everyone, except the consumer.
Source: Yahoo! - Music News
