Zune Pricing Announced

Thursday, Sep. 28 2006 | Author: jeremy

Microsoft’s “iPod Killer”, the Zune, will retail for $249.99, while songs for the device will cost about $.99 each. At this price, it sounds like Microsoft could take a loss on each unit sold, similar to what it did with the XBox 360.

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.

Category: Gadgets

3 Responses for "Zune Pricing Announced"

Marco (Griffith) Jardim

September 28th, 2006 at 4:20 pm
1

Suffer a loss at $249? I honestly don’t get it… it’s features at not *that* great.
Ben Yarbrough

September 29th, 2006 at 8:27 am
2

People just do not know how cheaply things are made! A big shot uncle of mine was once told by Ford CEO (as in the grandson or great-grandson of Henry Ford) that the cost of making a car–and I mean total cost, including paying the insurance on the building the cars are made in–is about 1/10 of the ultimate sticker price. This
1/10 figure holds true for most items that are manufactured. Suffer a loss? Their cost is probably around $25 per unit.
Marco (Griffith) Jardim

September 29th, 2006 at 2:36 pm
3

I think you’re a bit mistaken in this case. Car manufacturers produce almost all of their parts. They have factories they own that provide them with all the pieces they need to pull it together.

On the other hand, in the tech industry, most gadgets you know and use are build using various components from various factories. For example, now we all know that Apple’s and Dell’s laptops use Sony manufactured batteries. The first generation of iPod Nanos used Samsung flash memory, and so on, and so on…

The bottom line is, the more components a company builds for itself, the better the profit margin will be.