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Zune prices to fall

by on19 November 2008

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A repeat of the success of the Xbox 360 reductions?

It is not a mystery to anyone who is shopping for an MP3 player this holiday season that the Zune is not the first thought that comes to mind. When consumers think MP3 players they more often times than not think of the Apple iPod.

With the recent problems with the economy, Microsoft might be looking to repeat a little of the Xbox 360 magic by slashing the price of the Zune MP3 player. While the price drops are perhaps not as aggressive so as to make everyone take notice as with the Xbox 360 price cuts, nonetheless the cuts do signal an attempt to attract more attention to the Zune and make it an alternative for those who might be considering it vs. the iPod.

The price cuts will be only for the flash-based players for the moment; and the cuts will see the 4GB model drop to $99, the 8GB model to $139 and the 16GB model will receive the largest drop to $179. The cut will happen later today in the U.S. and on Friday in Canada. With the price reductions, Microsoft Zune players will be priced less than iPods offering the same capacity.

As part of the price cuts Microsoft is also launching a new round of TV ads to attract attention to the Zune this holiday season. In addition, Microsoft also launched the new 3.1 firmware upgrade, which adds three new games: Checkers, Sudoku and Space Battle.

In addition, the 3.1 firmware also adds new multiplayer modes for the existing Texas Hold ‘Em game. The multiplayer mode uses the Zune’s WiFi abilities to support wireless game play, and in addition a two-player wireless mode will be available in the new Checkers game as well. The 3.1 firmware also improves stability and player performance and addresses a few bugs, as well.

It remains to be seen how much of a real effect the price cuts will have on actual sales numbers. Microsoft has continued to innovate with the Zune to push the abilities of the device to challenge Apple without perhaps as much success as the company would like. Still, the Zune has captured enough market share that it is ranked as one of the top selling MP3 players if you don’t count the iPod. We suspect that while the price cutting will help, it is not aggressive enough to make a dent into the stranglehold that Apple has with the iPod in this market space.

Last modified on 19 November 2008
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