Microsoft Pulled Zune Pricing, They Will Not Be Undersold

The reason there was no pricing information released when Microsoft released the Zune announcement, the Apple price cut took them by surprise, so they pulled the pricing at the last minute to wait and see what happens. It is said they are taking a “We will not be undersold” approach, in preparations to make it’s run against Apple market dominance. Undercutting the price of the iPod is a major goal of Microsoft’s, according to insiders, and they want to at least match a comparable iPod and hope to undercut it.

American Technology Research analyst Shaw Wu echoed such reports on Friday, saying that the firm believes “Microsoft is re-thinking its pricing strategy amid potential wider losses to stay competitive in the marketplace.”

The iPod’s new low price throws a wrench into Microsoft’s plans. The company now needs to decide whether it can afford taking a second large financial risk by sticking to its previous pricing strategy, or hope its increased feature set can buoy the Zune at a price equal to or slightly higher than the iconic iPod. Source: BetaNews

This is a tricky situation for Microsoft, compete on features or on price, it will be hard to do both. The digital music player market is completely different from say the gaming console market, where you can loose money on each system sold and make it up in game sales. Most of Apple’s money is made on the sale of the iPod as not to many users are throwing down big bucks for music, yet, so Microsoft can’t hope to make up money on music sales as the market is probably not there yet.

Shoot low Microsoft, I’ll buy one if its cheap, for sure.