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September 29, 2006

rivals

Zune’s loss is Apple’s fault

Posted Sep. 29, ’06, 11:31 AM PT by Scott Silverman
Category | Apple » Rivals

200609291430Yesterday Dan gave us an informative update on the pricing of the Zune, revealing Microsoft’s plan to lose money. But a this may not have actually been Microsoft’s plan. Instead it seems to have been induced by Apple. With Apple’s pricing of the 30GB iPod at $250, Microsoft had no choice but to price their Zune similarly, to remain competitive. As Shaw Wu writes for American Technology Research:

We believe Microsoft not pricing lower demonstrates Apple’s under-appreciated supply chain strength where Microsoft will lose money. To us, the key question is whether Zune priced in-line with a video Pod will take share with its bulkier form factor, same Windows software currently available from 15-20 vendors, and inferior battery life.

Meanwhile each Zune player sold costs MS about $50, while each iPod sold makes Apple about $150. Goodluck Microsoft, you’re gonna need it.

[via MacNN]


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