iPod Pricing Took MS By Surprise

[Case]

This is good news for anyone who may be in the market for a portable media player in the coming months. It looks like Apple is going to be pricing their next gen 30gb iPod Video rather aggressively (http://www.appleinsider.com/article.php?id=2054).

"We believe Microsoft is re-thinking its pricing strategy amid potential wider losses to stay competitive in the marketplace," Wu wrote in his note to clients. "We remain underwhelmed with the much-hyped Zune, which is essentially a repackaged Toshiba Gigabeat, with limited differentiation vs. existing Windows Media devices.

Hopefully a little big name competition for Apple will trigger a price war, and this is only the first of many price drops. ( We can hope, right? ) Not like a need a new iPod any way... and not like i actualy paid for one, I like free stuff what can I say...

[micsaund]

Yeah, I agree that the price-drop caught MS by surprise. Notice how MS didn't mention the price OR the battery life -- and you know MS would pimp anything they can to reinforce the "iPod killer" hype they are spewing. Well, I read today that the Zune will have worse battery life than the new iPods, so obviously that part caught MS by surprise also, hence the initial lack of information about the Zune.

Between:
1) likely higher price, maybe equal
2) worse battery life
3) hackneyed DRM (doesn't work with other WMA DRM like "plays4sure" (yeah right))

I think that the Zune is not going to be much of a killer except to MS's budget as they immediately begin re-spinning the design to improve things.

Mike

[Case]

I dont think the battery life will matter the bottom line is PRICE people will buy it if its cheap enugh... that is the fact...

you sell more by sellign it for less and in turn make more money...

[micsaund]

That's why the iRivers and Creative cheapies are doing so well, right? ;)

[Giorgi]

Yep, competiotion always brings price cut and quality

[Case]

im not tlking about competetion im talking about simple economics... lets say i design and sell the T007 if i price it lower and sell greater qty's than i make more money vs selling fewer at a higher price... thats why you will se people with the worst MP3 players that got the worst review but they where cheap!

[micsaund]

Fortunately, not everyone subscribes to the "cheapest is best" philosphy and that's why we, as consumers, have choices between Daewoo and Mercedes Benz, Wal-Mart and Macy's, and cheap-knock-off X and iPod.

Personally, I'm at a point in my life where I no longer have to buy the cheapest of everything and instead, choose the product that I like the design of, the functionality of, and above all, the one "that just works." Everyone has their priorities and for those who target the cheapest possible money outlay on things, more power to them, but I'm thankful that not every manufacturer caters only to these Wal-Mart level shoppers.

And yes, I aknowledge that you can sell more things at a lower margin and make as much money as selling fewer things at a higher margin. That's economics 101 ;) Price is not everything to everyone, though, which is my main message. However, as someone who likes nice things but doesn't like over-spending, I am glad to see the competition coming to the iPod market as I will eventually benefit whether I go with a competitor or stay with the iPod, which is what the original post's concept was.

Mike

[Case]

Yea but you got to understand its the same situation with the HD DVD players nad blueray right now the ones who can aford it are far and inbetween from buying it and its not doing so well... its all about reaching the largest possible market hence why theres the ipod nano and ipod mini at lower price points to cover the whole market range...

Microsoft intends on doing the same thing with the zune..