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Microsoft Beats Rival To Discount With $50 Off Zune Music Player

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The Associated Press

Published: September 6, 2007

SEATTLE - Microsoft Corp. slashed $50 from the price of its Zune digital media player Wednesday, just before Apple announced an iPhone price cut and additions to its market-leading iPod line.

The 30-gigabyte Zune now costs $199, Redmond, Wash.-based Microsoft said on its Zune Insider blog.

'It's part of the normal product life cycle, something we've had on the books for months,' wrote Cesar Menendez, a Microsoft employee and Zune Insider blogger.
Zune comes in a handful of colors, but only one hard drive size, while Apple's music players come in many shapes and sizes and account for the vast majority of digital music-player sales in the United States.

Matt Rosoff, an analyst at independent research group Directions on Microsoft, noted that Microsoft is expected to announce new Zune models and features for this holiday season. Until then, it's not necessarily fair to compare the Zune with the iPod.

'I think they're doing OK considering that they are only competing against one iPod,' Rosoff said. If Microsoft adds to the Zune line, 'then it's really apples to apples.'

After Apple changed the game with the iPhone, Microsoft watchers have been parsing executives' comments for hints of a Zune phone for the holidays, but Rosoff said he thought that was unlikely.

The company is 'pretty devoted to the idea of providing software' to cell phone makers, he said.

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