Zune Goes Discount, Causes $289 Million Loss for Microsoft

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.

Zune Exec leaves Microsoft

The Unofficial Apple Weblog (TUAW)

Thu Feb 1

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