TECH | Zune Will Loose Money

According to Microsoft, the only way be beat Apple is to loose massive amounts of money. Not by having a better product, but by loosing money….. hmmmmm

Well, Microsoft has brought its A-Game with its digital media player. How can I tell? They're planning to lose money on it.

Yes, as Reuters reports, Microsoft plans to offer the player for the same price as the 30g iPod -- even though that isn't profitable!

"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."

Sure it is! A multiyear strategy of bleeding revenue while offering a product that has, at best, minor advantages over the market leader and big disadvantages in others! Like every other non-iTunes offering, the Zune Marketplace will offer $15 monthly subscriptions for full access to their music library.

They'll also sell individual songs for a price slightly better than the 99-cent standard at Apple. How much better? How does one-quarter cent sound to you? MS is using a system it calls MS Points, which sell for 80 to the dollar for no discernable reason. For just 79 of those bad boys, equivalent to 98.75 cents, a song can be yours!

Whoa. Apple's really in trouble now!

Soucre: Wired