Zune’s Swoon Hits Microsoft Where It Hurts

Jan 30th, 2007 // 3 Comments

On a day when Microsoft is trying to celebrate its Vista launch, the Redmond-based behemoth has to wave away the stench from its shiny brown turd. From CrunchGear:

Sadly, we have to report that the brown brick cost Microsoft $289 million last quarter, hardly the numbers the company was hoping to post at this time. While we’re assured from our internal sources that the next rendition of the Zune (it’s not the Zune II) will address many of the shortcomings of the current model, and that the group has a roadmap to profitability in the works.

That’s good news, as over the weekend we stopped by our local overstock and discount store in Seattle and were shocked–shocked!–to find a stack of nearly a dozen brand-new, unopened Zunes selling at $168. That’s about 25% off the going rate of $229 we’ve been seeing around ze Web, making it a good deal for someone looking for a Zune.

If there is anyone out there still looking for a Zune. But this deep discount raises one question for us: Does the slashed price mean that Universal gets a smaller cut than the dollar-per-unit promised to them? If not, we bet that avoiding bad deals like that one during the development of future Zune models be a huge stepping stone on the above-referenced “path to profitability.”

Zune Goes Discount, Contributes to $289 Million Loss for Microsoft [CrunchGear]

  1. Butch Huskey

    i still don’t get why Microsoft priced the Zune at roughly the same as an IPOD, take the walmart strategy – lose money on the price by selling cheaper than the other guy, sell tons, other guy goes out of business, raise price without competition

    a $149 Zune is much more attractive than a “same price as Ipod” Zune

  2. beta.rogan

    Does a screaming asian girl (next to two people apparently making out) really pop on the screen when the software fails to install?

    Who are the advertising geniuses who came up with THIS one?

  3. BlackIrish

    Gates and company need a Zune Messiah.

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