Wal-Mart Leaks Zune Price

nieske writes, "Engadget reports that Wal-Mart accidentally published online the intended price of the Microsoft Zune; the iPod rival would apparently retail for $284. The price was quickly pulled from the Wal-Mart site. Reports say that Microsoft was flustered when Apple dropped the price for the iPod 30 GB, previously $299, to $249. BetaNews states that 'undercutting the iPod is a major goal of Microsoft's upcoming effort.' Will Microsoft respond to Apple with another price drop?"

Comments

Will MS respond? Yes.

[RootWind]

Down to $229.99 apparently: http://www.gizmodo.com/gadgets/portable-media/zune s-final-price-22999-msrp-202066.php

Not true

[rbarreira]

David Caulton, who works on the Zune at Microsoft, has already said (more than once) in his blog:

A commenter mentioned that they'd "read" that Zune would cost more than the 30GB iPod. I can only say: Don't believe everything you read. I can't specifically talk about price, but I can say that Zune won't be undercut on price by iPod.

And:

I can't say more than what I've said, but the statements "The iPod 30GB costs $249" and "Zune won't be undercut on price" are pretty clear on that point ;)

Re:Not true

[truthsearch]

The problem for MS is they can't stand to lose too much on the sale of each Zune. While sellling the xbox at a loss they recover (somewhat) in the sale of games. They don't have a profitable music service which will compensate for losses on the Zune. Again they'll take a huge loss to get into a new market. But with the Zune they have no way to recover costs later unless they eventually raise the price.

Re:Not true

[tb3]

No, because Apple didn't have any online music sales before they launched the iPod. Then they did iTMS, and it worked.

Microsoft, on the other hand, has tried numerous times to sell music online, and failed each time. That's their track record. What part of that is so hard to grasp?

Re:Not true

[Volante3192]

How will Microsoft recoup losses to the Zune later on?

They'll mark up the next Office by $100. Problem solved.

A good use for the Zune

[Secrity]

It seems that the Zune has a use after all, as a method to get Apple to reduce it's prices on the iPod.

Re:A good use for the Zune

[eclectic4]

"We know the stories about Apple (ab)using cheap labour to maintain the iPod's profitability at the moment"

Trolly troll. *sigh* I'll feed you...

Microsoft will also be (ab)using cheap labour to maintain profitability, it's how business is done. The shirt you are wearing, the computer you are typing on, etc... were all made using cheap foriegn labour. Apple voluntarily investigated the accusations, hired a third party to oversee, and has since been shown to be largely false. If Apple "abuses" anything, it's cornering the market on components

"Microsoft may be using their position to deliberately push Apple into a crisis."

Actually, it seems Apple dropping their prices has actually pushed Microsoft into a "crisis". Apple holds 75% of the digital music playing market, and it accounts for about 40% of their profits (all other coming from Mac and software sales). I'm not sure you know what you are talking about.

Re:Will MS respond? Yes.

[rbarreira]

That would be great, but I wouldn't trust a sentence starting with "One of our moles on the inside told us...".

It's doomed

[clickclickdrone]

Let's be honest here.
Ipod is synonamous with MP3 player now. Even grannies going to the shops for their grandchildren will ask for an iPod by name. We say podcast, podcasting. I can't see people Zunecasting. Unless the Zune offers something substantially better or a great and highly compelling new feature (Actually, I've just thought of one, maybe I should copyright it right now..) no-one else has thought of then it's just not going to sell. The only hope MS have is to back it up with an extremely cheap song purchase system but I can't see them doing that without oodles of DRM involved.

Re:It's doomed

[_xeno_]

One major killer feature of the iPod are iPod accessories. If Microsoft wants to compete with the iPod, they'll need to be completely compatible with it.

I have an iPod adapter for my car radio. I hook my iPod up to it and can play directly through the radio. This isn't one of those little "FM radio car adapters" either. It puts the iPod into "control mode" or whatever they call it, and can change playlists and move through the playlist directly though the radio.

This is good, because the radio is designed to be easy to control from the driver's seat without looking at it. The most used buttons (skip song, volume) are shaped to be easy to tell by touch and are positioned to be within easy reach.

As far as I know, there is no adapter kit for my radio for any other MP3 player on the market. Only one for the iPod.

If Microsoft wants to compete with the iPod, the Zune needs to be able to support the accessory market. The iPod may not be the greatest MP3 player ever created, but it has the accessory market, and that provides a lot of value that Microsoft will be missing.

Sexy sells

[Rik Sweeney]

Once again on the price, you need to make a product sexy to sell it. The dancing silhouette with the white headphones sold the iPod because it looked good.

So Microsoft, I propose you do this:

A dancing Ballmer silhouette.

My pulse is rising already just thinking about it.

Re:Zune? WTF?!?

[T.E.D.]

The thing is called "Zune". What does that mean to anybody?

Its something to listen to while drinking a Zima?

Re:Zune? WTF?!?

[chrismcdirty]

Likely, it will only go the way of this lame mp3 player.

Re:Will MS respond? Yes.

[gEvil (beta)]

Hey, if anybody's gonna have some good insight into the underworld, it'd be a mole...

Re:Ease of use vs price?

[Lumpy]

And can you imagine the DRM nightmare that is going to be on that MSFT device? I have clients all the time needing help moving music they ripped on mediaplayer to a new machine. they will not play because they did not set the "dont encumber my music with drm dammit" flag in the advanced settings hidden in mediaplayer. so I haveto explain to them what DRM is and they still do not understand.

The other biggest failure of the Microsoft device will be that I dont care what service they couple with, iTunes has way more music selection on it that anything Microsoft can come up with.

I dont love the iPod, I'm a non drm kind of guy with my iRivers... but microsoft is not known for open and easy to use.

Re:Will MS respond? Yes.

[neoform]

So, the question is, will MS do with zune as they did with the xbox and sell it at a loss just so they can overtake apple.. ?

also, why is a zune price leak in the apple section?

Re:Zune? WTF?!?

[Ubergrendle]

Because "iPod" is a perfectly intuitive brandname? Even 'walkman' doesn't make much sense, although I guess you can walk and you are a membmer of mankind when listening to music.

Re:Will MS respond? Yes.

[tb3]

Is this dumping?

I'm serious. With their huge cash reserves, Microsoft could enter the market in toilet seats tomorrow, price them at 99 cents, drive everyone else out of business, and drive up the price to $10,000 a seat.

We've already seen them put Netscape out of business by giving away the browser, so can Apple (or any other manufacturer) cry 'foul' and accuse Microsoft of dumping? What are the laws in this situation?

Re:Will MS respond? Yes.

[rbarreira]

Are freeware writers also dumpers? Do they start being dumpers if they later start charging for their software? Mmmmm...

Re:My predictions were right,,,

[MightyYar]

They have to be careful. If it is cheaper than the iPod, that could add to it's image of being a knockoff. It's like wine. People look at all of the bottles on the shelf and don't have any idea what the difference is, but their pretty sure that the $40 bottle is better than the $6 bottle, even though that isn't really true at all. Put yourself at best buy. The 30GB iPod (which you've heard of and seen before) is $249 and this Zune thing is $229. You quickly scan the specs, see that they are about the same, and figure that this Zune thing must just be a cheap knockoff. On the other hand, if it were $259, you might ask a salesperson what the difference is.

All of this is moot anyway - they went after the wrong market, IMO. The most popular iPod is the tiny little Nano. Unless they were trying to create a niche product, I'm not sure why they didn't go after the biggest market.

Who runs MS, anyway? Who thought it was a great idea to compete with their licensees? And then against Apple's iPod, where all others have failed? If I was a shareholder I'd be furious. If I were a licensee I'd be furious. If iPod sales ever go flat (don't they have to at some point?), Apple might get a nice reception to an offer to license FairPlay now... a real "plays for sure".

Zune is a loss leader

[snowwrestler]

The product it is leading is Vista.

In the 1990's Microsoft spent thousands of man-hours creating a pen operating system that died on the vine. It was a pure cost to the company, no profit. But the key point is that it died AFTER the GO Penpoint operating system died. Martin Eller, one of the Microsoft staff involved, even has a quote in his book:

"This wasn't a thing about making money. This was all about 'block that kick.""

Apple makes money selling iPods, but the big play for them is the iPod halo effect to sell more Macs. Macs (and Mac software) are much more profitable than an iPod. The release of Vista, with all its associated angst, represents a big opportunity for Apple. Microsoft will fight that halo effect with everything they've got, even if they have to lost money on every single Zune. They make their money from Windows, and this is all about protecting the Microsoft market (and mind) share.

Re:Will MS respond? Yes.

[rackhamh]

Is this dumping?

I'm serious. With their huge cash reserves, Microsoft could enter the market in toilet seats tomorrow, price them at 99 cents, drive everyone else out of business, and drive up the price to $10,000 a seat.

We've already seen them put Netscape out of business by giving away the browser, so can Apple (or any other manufacturer) cry 'foul' and accuse Microsoft of dumping? What are the laws in this situation?

Yes, and we all know how Microsoft ran up the price of Internet Explorer once Netscape was out of the picture...

Re:Will MS respond? Yes.

[ookaze]

Yes, and we all know how Microsoft ran up the price of Internet Explorer once Netscape was out of the picture...

Yes we know, and for those skeptical people out there, here it is : they ran up the price by not paying anymore people on improving Internet Explorer. Which means that before, the price of Windows included the cost of the dev team on IE. After Netscape was out of the picture, the price of Windows didn't include that cost anymore, but was still the same.

Re:Will MS respond? Yes.

[Garabito]

I'm serious. With their huge cash reserves, Microsoft could enter the market in toilet seats tomorrow, price them at 99 cents, drive everyone else out of business, and drive up the price to $10,000 a seat.

It would give a new meaning to "per-seat license"

Re:Will MS respond? Yes.

[operagost]

I'll wipe with the End-user Latrine Agreement (EULA).