Will Microsoft’s Ipod-Killer Hit The Pricing Sweet Spot?
Slowly but surely the Microsoft battle plans are being revealed, and many have wondered if ‘price’ would be the bloodiest front on the war against Apple’s iPod. Surprising to some, Microsoft has just announced a $250 USD price-point for the Microsoft Zune, basically putting it on equal footing with the iPod and initially eliminating ‘price’ as a major battleground in the duel for marketshare.
“It’s not going to be price that really drives people to Zune,” said Michael Gartenberg, an analyst with Jupiter Research. “It’s going to be the quality of the device and the quality of the experience that will make consumers’ decisions. The price is a wash.“
This is a very intelligent move for Microsoft. They could easily low-ball the introductory price of the Zune, but in some ways doing so would be admitting defeat from the onset. By starting out on equal footing, Microsoft will focus market attention on some of the unique features the Zune will have that the iPod currently lacks ie, built-in FM transmitter and wireless connectivity/sharing.
How long will Microsoft be able to avoid the irresistible urge to use its vast financial weight to undercut the iPod on price? Time will tell, but chances are this Christmas buying season is going to tell us a lot about how receptive buyers are to Microsoft’s entry into this brand-conscious MP3 market.
You’ll pay to the tune of $250 for Zune [Seattle PI]
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