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September 28, 2006

Other Zune shoe drops, pricing and availability announced

Posted by David Hunter at 10:25 AM ET.

Back on September 14, Microsoft teased the crowd with a lot of information on their upcoming Zune personal media player, but glaringly absent were any details on pricing and availability. That just got fixed:

Today the company announced that the Zune™ digital media player and online service will be available to consumers in the U.S. on Nov. 14, 2006, just in time for the holidays. The Zune device will retail for $249.99 U.S. (ERP) and will create new ways for entertainment fans to connect and share media experiences device-to-device through the use of wireless technology and new software scenarios.

So Microsoft decided to match the new price of of the 30GB iPod that was announced by Apple on Sept. 12.

As for the Zune Marketplace:

• A Zune Pass subscription gives consumers access to millions of songs for $14.99 per month.

• Users can purchase songs individually using Microsoft® Points for 79 points per track. Similar to a pre-paid phone card, Microsoft Points is a stored value system that can be redeemed at a growing number of online stores, including the Xbox Live® Marketplace.

According to the latest exchange rates, 1 Microsoft point = US$0.0125, so 79 points is US$0.9875 which is very slightly less than iTunes’ 99 cents a track. I think the good news here is that contrary to earlier rumors, Microsoft is offering a fixed price per track purchase plan instead of variable pricing, bundling, or a mandatory subscription.

There’s more by following the link including details of the preloaded audio and video content and pricing for the Microsoft accessories.

Update: It’s a price war – Microsoft forthrightly states that this first version isn’t going to be a moneymaker, but they have high hopes:

Microsoft said it needed to put a comparable price on Zune, even if it meant that the company will suffer a loss from the device’s sales this holiday season.

“We had to look at what was in the market and offer a competitive price,” said Scott Erickson, Microsoft’s senior director of product marketing for Zune. “We’re not going to be profitable this holiday but the Zune project is a multiyear strategy.”

The Redmond, Washington-based software giant has said it plans to invest hundreds of millions of dollars to develop and market the Zune, and acknowledged the investment may take years to bear fruit.

Filed under Argo, Microsoft, Zune

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3 Responses to “Other Zune shoe drops, pricing and availability announced”

  1. Microsoft Weekly Miscellany, October 14, 2006 -- Microsoft News Tracker Says:

    [...] Steve Ballmer’s Business Week interview also produced the revelation that Microsoft is not losing money on each Zune sold although he would have liked it better if Apple had kept the price of the comparable iPod at $299.  This is directly contrary to previous Microsoft statements. [...]

  2. Would these TV ads make you buy a Zune? -- Microsoft News Tracker Says:

    [...] The November 14 USA launch of Microsoft’s Zune is rapidly approaching and while the marketing has been low key so far, expect to see the sky darken with ads shortly. Microsoft’s Cesar Menendez points to the first Zune TV ads which he has posted on YouTube. To be perfectly frank, I am hard pressed to see how any of them will snag people in the market for a personal media player to buy a Zune as opposed to any other brand. I’m sure the budget was large and that they tested them with some sort of focus group, but the one with the most Zune specific content is bizarrely uncomfortable and the others barely show the Zune in passing. On the other hand, maybe pet lovers are one of the hot Zune demographics: [...]

  3. Gates says Microsoft developing an online payment system -- Microsoft News Tracker Says:

    [...] What Mr. Gates describes is a micropayments system rather like Microsoft Points which started out as the popular “currency” of the Xbox Live Marketplace, but since has spread to the Zune Marketplace and general merchandise. Heck, maybe it is Microsoft Points. In any case, it will give the folks at eBay’s PayPal and Google Checkout something to think about it. Filed under Executives, Coopetition, Bill Gates, Xbox, Google, eBay, Microsoft, PayPal, Argo, Zune [...]

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