Microsoft on Thursday said it will offer its Zune digital music player for $249.99—a comparable price to Apple Computer’s U.S. market-leading iPod device with similar storage capacity—and as a result the Redmond, Wash.-based firm will lose money during the upcoming holidays, Reuters reports.
Zune will hit U.S. stores on Nov. 14, and its companion Zune Marketplace online store will sell songs for $0.99 each, according to Reuters. Apple charges the same price for songs at its uber-popular iTunes Store. Microsoft will also offer a monthly subscription plan under which customers could pay $14.99 for a month’s worth of access to the Zune Marketplace’s content—though when the pay period is up, they’ll be blocked unless they pay for an additional month, Reuters reports.
Microsoft said its marketplace will initially offer 2 million songs to Web surfers, according to Reuters. The firm will employ a “Microsoft Points” system to sell content, and users will be able to purchase 80 points for $1. Single songs will go for 79 Microsoft Points, according to Reuters.
It’s clear that despite its pledge to invest hundreds of millions of dollars into Zune, Microsoft has its work cut out for it if it hopes to take a bite out of Apple’s impressive user base. The firm is not challenging Apple with its price; rather, it’s hoping the upcoming Zune device’s wireless and content-sharing capabilities will draw existing iPod users and new customers to it instead of to Apple, which doesn’t currently offer such functionality via its music players or download store. Microsoft’s Zune will also come with a radio tuner—another feature Apple’s media players lack, though add-on tuners can be purchased—and a slightly wider screen than Apple’s video iPod.
“We had to look at what was in the market and offer a competitive price,” said Microsoft’s senior director of product marketing for Zune, Scott Erickson, according to Reuters. “We’re not going to be profitable this holiday, but the Zune project is a multiyear strategy.”
Two more notable points: Microsoft will at first offer only audio content and no video via its marketplace; and Zune will come with a number of songs, video clips and photos preinstalled, Reuters reports.
Last month, it was reported that Japan’s Toshiba will manufacture the device for the software giant.
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