digital music/video
07/27/2006, 6:55pm, EDT
Thursday, July 27th
MS spends big on Zune, expects loss
A Microsoft executive today said that the software giant's recently announced Zune player will result in one product this year, but will cost "hundreds of millions of dollars" in research development. The company expects to lose money in the near-term as it builds out its services and debuts new, innovative devices. Microsoft will start by selling the "Zune" player this year, expanding on that launch with a new product line by the next calendar year, "as well as broadening the product lines over time," according to the Wall Street Journal. Microsoft last week confirmed that it is in fact developing a portable media player to compete with Apple's market leading iPod, possibly to the chagrin of various Microsoft partners. [updated]
Analysts said they expect Apple to counter Microsoft's new product with new features and more innovation, but the Microsoft executive stressed that Zune is a long-term gamble, adding that it will take time to achieve.
"This is something that is going to be a three-, four-, five-year investment," Bach said.
Apple currently leads the market with its iPod portable media players and its iTunes Music Store. Apple in February announced that it had sold its one billionth song via the iTunes Music Store, and later announced that it had sold one million videos just 20 days after unveiling video download content to consumers.
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Oh, I see, kind of like Vista...off in the distance...way off...
That's incredibly expensive. Imagine how much it would have cost if they actually had to create it from scratch, instead of just copying the iPod and iTunes and then tacking on a few extra features to try to appear innovative.
On another note, I just love how they're screwing their partners on the PlaysForSure thing-- that is hilarious. Really gotta hand it to Microsoft: compete with them at your own peril, or partner with them at your own peril. That kind of choice ranks up there with deciding where to take the first bite of a dog crap sandwich. :-)
~Philly
i personally think M$ should have used that money to... i don't know... maybe fix vista?? it seems they have no direction. they are more worried about trying to crack a market they have no idea about than trying to release software.
Gates must be proud!!