Zune Prices Collapse
Prices for new Zune players have collapsed amidst growing inventory levels. According to Creative Labs:
Microsoft, the world’s largest software maker, used price cuts to bolster sales of the Zune to challenge the iPod, Creative said. Sales in the Americas accounted for 30 percent of Creative’s total revenue in the quarter ending June 30, down from 46 percent a year earlier.
Over on Amazon the Zune is selling new from $207, down from the $249 list price only a few months after it went on sale. And according to Helen Malani:
….found a cute pink MP3 player on Target.com at a retail price of $249.99, so I entered that information, along with the date, on PriceProtectr.com as a test. A week later, this message appeared in my inbox: “Price Protectr saw a price drop on the Zune Music-Video Player 30GB – Pink you submitted for price protection at www.priceprotectr.com. You purchased the item for $249.99 and it just dropped to $89.99!”
The cool reception for the Zune is in response to large inventories in the channel coupled with a very luke warm reception from the media and market in general.
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Zune Potato makes the point that the price reduction is due to the run out for a new model. If this is the case it still shows that there is no demand in the channel for the product. There is no Zune at least until before christmas.
A more likely story is that Microsoft stuffed the channel prior to the earnings numbers in order to make it look like it is selling.