Microsoft Readies Zune for War

Posted in Apple, MP3 Players, Retail on October 2nd, 2006

Microsoft has chosen a conservative path by pricing the Zune portable media player at $249 US retail. The price is competitive with the Apple iPod (30GB). Zune's music store will similarly be competitive with $1 downloads and $15/mo unlimited rental service (comparable to RealNetworks' Rhapsody).

By refusing to price the new product as a loss leader to capture market share, Microsoft risks being rolled over by Apple's superior brand and market share. Zune will compete against the iPod with extra features – wireless file transfer, file sharing, FM tuning, and a subscription offering that iTunes doesn't offer. Few observers, including this writer, believe that this strategy will make a significant dent in Apple's position.



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