Zune Goes Discount, Causes $289 Million Loss for Microsoft

News Type: Event — Seeded on Mon Jan 29, 2007 6:33 PM EST

Article Source: CrunchGear

business, technology, music, money, microsoft, mp3, gadget, zune, revenue

We've been doing a lot of coverage on the Microsoft Zune here at the Gear, and there are good reasons for that. When the largest technology company in the country (world?) decides to go head-to-head with the de facto variant of the MP3 player, we have to report on that. When said company utilizes innovations (no matter how emasculated) like built-in WiFi, we report on that, too. We like the Zune—especially Blake, but you all know he's a PC fanboy.

Sadly, we have to report that the brown brick cost Microsoft $289 million last quarter, hardly the numbers the company was hoping to post at this time. While we're assured from our internal sources that the next rendition of the Zune (it's not the Zune II) will address many of the shortcomings of the current model, and that the group has a roadmap to profitability in the works.

The Zune has to be one of the worst products Microsoft have ever made. I seriously doubt it will ever make money. The damage has been done with Zune 1. Do Microsoft really think that people will be the next release of Zune given how bad the original is.

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{"commentId":501644,"authorDomain":"janeway77"}

Michael the Great

Microsoft has this bad habit of trying to tell people what they are supposed to like, and then expecting them to fall into line.

They did that way back when with MSN. Once upon a time, MSN was a proprietary, closed system. You could use it to access the real Internet, but it was tough to figure out. I think this was Microsoft's attempt to recreate the Web into its own image.

They seem dumbfounded that everybody didn't through away their iPods and buy a Zune because Microsoft said so.

I own stock in these clowns, and they are really disappointing me lately.

{"commentId":501644,"threadId":"72049","contentId":"543376","authorDomain":"janeway77"}

1 vote

#1 - Mon Jan 29, 2007 8:09 PM EST

{"commentId":501645,"authorDomain":"Hegemonic"}

Hegemonic

I love my Zune, to say it's the worst product they ever made only means you've never had the displeasure of using Windows ME.

{"commentId":501645,"threadId":"72049","contentId":"543376","authorDomain":"Hegemonic"}

2 votes

#2 - Mon Jan 29, 2007 8:10 PM EST

{"commentId":502020,"authorDomain":"spudsstuff"}

Spuds Stuff

Windows ME! Now you are bringing back bad memories for me.

{"commentId":502020,"threadId":"72049","contentId":"543376","authorDomain":"spudsstuff"}

#2.1 - Tue Jan 30, 2007 1:05 AM EST

{"commentId":501749,"authorDomain":"jaketracey"}

Jake Tracey

Or Microsoft Bob!

{"commentId":501749,"threadId":"72049","contentId":"543376","authorDomain":"jaketracey"}

#3 - Mon Jan 29, 2007 9:20 PM EST

{"commentId":502180,"authorDomain":"smallworldpodcast"}

small WORLD podcast

I've heard tell that Zune 2 is going to kick ass and that Microsoft is willing to eat the loss of the Zune 1 to get their foot in the door.

I'm not a supporter of Zune, I'm just sharing what I heard. I still have my second generation iPod which looks like a white brick compared to the current models but I'm still very happy with it.

Speaking of looks, the Zune is like a station wagon with cheap wood paneling while the iPod looks like a sports car. I'm not the fist one to make that analogy regarding the two companis but it's still pretty apt.

{"commentId":502180,"threadId":"72049","contentId":"543376","authorDomain":"smallworldpodcast"}

#4 - Tue Jan 30, 2007 7:04 AM EST

{"commentId":502183,"authorDomain":"janeway77"}

Michael the Great

I've heard tell that Zune 2 is going to kick ass

We heard that about Zune 1 too. It didn't turn out so well.

{"commentId":502183,"threadId":"72049","contentId":"543376","authorDomain":"janeway77"}

#4.1 - Tue Jan 30, 2007 7:14 AM EST

{"commentId":502431,"authorDomain":"jaoson4188"}

Jason4188

The first XBOX was pretty crappy. The 360 is great though. Maybe they will pull it off with the Zune. I try not to under estimate billions of dollars in leverage. They are actually turning a profit now from the XBOX. It took five years, but their persistence is paying off.

{"commentId":502431,"threadId":"72049","contentId":"543376","authorDomain":"jaoson4188"}

1 vote

#4.2 - Tue Jan 30, 2007 10:46 AM EST

{"commentId":504947,"authorDomain":"vesper"}

Vesper

My thoughts about the Zune 1 or 2. If record labels are going to lock out songs from being shared using that draconian DRM thing that they have with their WiFi sharing, then the Zune is never really going to work.

I mean really, what's the point of adding a DRM on top of another DRM just so that you can send a song to another Zune user only so that the song sent can be removed in 3 days or 3 plays.

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#5 - Wed Jan 31, 2007 2:26 PM EST

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SPUDS STUFF

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Zune Goes Discount, Causes $289 Million Loss for Microsoft

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