05-03-2007, 08:00 AM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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Zune Price Drops: Reality Check
"Joe Wilcox writes that many retailers are starting to offer steep discounts on the Zune, which may indicate they are having trouble moving units. Staples is selling it for $199.99, fifty dollars off, Circuit City has it for $220. Amazon also has it for $220. So, what does it mean? Well, it could mean poor sales, absolutely...the other theory: Zune Version 2 is coming, and retailers know it, and are trying to offload inventory before that happens. It’s certainly possible."
I was reading this blog post by Nathan Weinberg and I was thinking that the online world sometimes gets so irrational it's funny. In this instance, we have a price drop on the Zune - Weinberg speculates it's because the product isn't selling very well. Possible? You bet - since you can get a 30 GB iPod for between $230 and $250 USD, the Zune at $249 isn't competitive on price at all. And when you're the underdog you need every advantage you can get - I always thought the Zune should have come out at $199 and undercut the iPod by a solid $50 margin. Weinberg's second theory is that since the second generation Zune is "coming", the price is dropping to clear the current inventory.
Reality check time: no company with an ounce of sense in their head releases a produce in November and obsoletes it by releasing a second version only five months later. I think some people were so disappointed with the first-generation Zune they're hoping it will fade away and become a memory, rapidly replaced by a newer, thinner, better version. That's going to happen eventually, but not five months after launch! That's just idiocy, and Microsoft may be a lot of things, but they've never been accused of shipping products too fast.
I believe there's a Flash-based Zune right around the corner - perhaps coming out this summer - but I wouldn't expect a second generation hard-drive based player to show up until holiday 2007.
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05-03-2007, 08:31 AM
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Ponderer
Join Date: Sep 2006
Posts: 52
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Quote:
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Reality check time: no company with an ounce of sense in their head releases a produce in November and obsoletes it by releasing a second version only five months later.
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Cell phone manufacturers do this all the time. It's the only way to keep up with the competition.
I think it's hard to speculate on prices. I'd assume that online retailers give a discount on most products they sell (Amazon certainly do in the UK). It's only because Apple demands that no-one discounts their goods that we haven't seen similar price reductions on the iPod.
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05-03-2007, 02:27 PM
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Pupil
Join Date: Oct 2006
Posts: 14
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The prices have dropped for the original colors. The pink ones are still $249. This could also be a move by Microsoft to get more units out there to increase the number of subscriptions.
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05-03-2007, 03:15 PM
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Contributing Editor Emeritus
Join Date: Sep 2006
Posts: 1,053
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Cell phones are a different industry. You've got somewhere around a billion sold year I believe. That leaves a lot of room for new phones daily.
I agree, MS isn't coming out with Zune 2.0 this summer. A flash Zune? Sure, I can see that one.
I think we will also, finally, see a real firmware upgrade. I hope. 
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05-07-2007, 07:59 PM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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Quote:
Originally Posted by Sage
Cell phone manufacturers do this all the time. It's the only way to keep up with the competition.
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No they don't. You will not see Motorola launching a new version of the RAZR or KRZR five months after it's released. Different phones? Sure - they have a "rolling thunder" approach to product releases. But I'm talking about a new version of a phone only five months after it's released...I've never seen that happen, even from a cell phone company.
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