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Do you have anything to support that MS lost billions on the xbox, I heard it was more like they broke even...
I have no idea where you got that one from. The original Xbox never made a profit. Microsoft is deliberately selling the Xbox 360 at a loss to capture marketshare. However, the PS3 and Ninetindo Wii are selling like hotcakes, are latest big things, and have the buzz. The best laid plans ...
 
Money talks. A big ad campaign will produce much increased Zune sales.

And it's also true for Apple. Many people buy iPods because they have seen all of those TV ads and billboards, not because they did extensive comparison shopping.

Come to think of it, a good number of iPod purchasers are filling demands of their kids, who specifically plead for iPods. And kids are greatly influenced by advertising.

Which kids? The same kids who are specifically pleading for MacBooks? ... Windows, and the ever-uncool Microsoft is getting long in the tooth (and those who may want Vista will have to start thinking about replacing their old PCs anyway), and and the Zune is too late in the game. It doesn't matter that they have 95% of PC marketshare and a lot of money to burn. So did the Roman Empire, for that matter (money, not marketshare 😛 )! Remember what that guy from Creative said about "spending billions on advertising"? Dit it work? They even had to resort to a foul patent infringement lawsuit to earn some cash and keep afloat!

Sure, if there's a company that can easily perform a media-blitz, it's Microsoft, but OTOH, if there's a company which is ALREADY doing it (try "doing it from day one"), it's Apple... It's actually quite impressive for such a small company! But then again, everything Apple does is quite impressive on its own. 😉

Anyway, isn't Apple historically a very marketing-happy company? "1984", "Lemmings", "Think Different", "Switch", "Silhouettes", now the "Get a Mac" campaign... Unlike a company we know, which is almost exclusively marketing-driven (FUD, vaporware, "Office Dinossaurs", "Start... something... whatever"... "Welcome to the Social", WTF?... 🙄 ). Apple has a top notch product, and M$ does not. And they will certainly respond if M$ even attempts doing something that remotely resembles a media-blitz, and will certainly come out on top (especially if, as a product-driven company that they are, they keep coming up with a stream of new, competitive iPods...).

The Zune is DOA, I'm afraid... And Microsoft isn't looking too good, either, and even though they'll still be around 10-15 years from now, they probably won't reach their 50th anniversary (unlike Apple, I'm guessing)... I might be wrong, but IMHO, this whole Zune-to-be debacle will be the first (or is it?) among many nails in M$'s coffin, because in this case they initially set out to compete with an established and nearly invincible leader, unlike their constant (and not that successful) attempts at controling emerging markets. Honestly, why does M$ keeps trying to "innovate" on each and every market, instead of just focusing on the PC platform? They are only making fools of themselves by reusing (our outright copying) other companies' designs, by slapping stock photos and un-catchy slogans all over their software and websites, etc... 🙄

People may have fallen for their lines for 20+ years, but they may one day wise up as far as the PC market is concerned, I hope (of course, someone would have to come up with a viable Windows competitor, whether Apple's own OS X - not very likely for reasons everyone in this board is more than aware of -, or some OSS driven platform, who knows?)... Because they're already showing signs of that on the consumer electronics market. 😎
 
Microsoft lost billions on the Xbox and likely to lose hundreds of millions on their Zune attempt. iPod sales have been profitable for Apple since their introduction. How one measures success in this industry can't always be marketshare.

One of the best points I've read so far - and one that I wish more people would apply to Apple's share in the computer market...🙂
 
I have no idea where you got that one from. The original Xbox never made a profit. Microsoft is deliberately selling the Xbox 360 at a loss to capture marketshare. However, the PS3 and Ninetindo Wii are selling like hotcakes, are latest big things, and have the buzz. The best laid plans ...

It may not be true that they broke even, it's just something I thought I heard on a tv interview...

Sony is selling the PS3 at a loss as well, Nintendo I'm sure is making money on the Wii...

There was also a lot of buzz for the 360 a launch & after, MS has sold over 15 million XBOX 360's in the last year, so I think they have done pretty well....

I don't think Sony has the best plan, if they did they would have launched earlier, had more units at launch & not be so overpriced...
 
Honestly, why does M$ keeps trying to "innovate" on each and every market, instead of just focusing on the PC platform?


Because they fear the iPod and what it — and its ecosystem — may potentially evolve into; becoming a platform in its own right, particularly with the convergence of multimedia in the home.
 
Erm... So you're calling a slightly reheated Toshiba Gigabeat-POS with pseudo-WiFi (sure, it may be fully enabled in the future, but with a screen with that resolution, it'd be preety much useless) a "moterately high ante"?

<snip>

And by the way, there's already a "Gates' sucessor", and I'm talking about the CEO title, not the Chairman... Come to think about it, Ballmer is already a "chair-man" of sorts... 😀 And we all know how smart that guy is. 🙄

What I meant by moderately high ante was the dollars spent, not the product.

I don't think we'll know what MS executives will do when Gates leaves until he's gone. Even Mr. B.

Don't get me wrong - I think the Zune is crap. However it's always foolish to ignore the 800 pound gorilla, even when it's lazy and clueless. They can wake up and buy clues.
 
Amazon Chart

The problem with the Amazon chart is you can guess a Thursday at 5 PM ranking is better than a Sunday at 4 AM ranking but it's hard to tell exactly if one means sales of 1,000 and one means sales of 18 - last time I checked, the Zune was 48 with a couple ipod cases selling better but of course, it's better to crowd the top 10.

Yea, MS still thinks it's 1992. Notice how they trumped the Zune would be in 30,000 stores versus 10,000 for the ipod? Does anyoen want to point out the internet to MS? That no matter what town I live in, in 1992 I might've had 1 choice in buying consumer electronics but now I can be in Middle Nowhere, North Dakota and literally have 100,000 stores + eBay at my fingertips? And where Ms counts on - no choice but ours to buy - the default choice - iPods on the other hand are not at Walgreens or 7-11 but people still find them ... amazing what world class hardware, software and online store will do for you.

Ms doesn't understand why when consumers have a real choice, they seldom choose MS products (webtv, talking barney's, watch OS or Melinda Gates' last MS project - the answer to OS7, MS Bob).

Looks like Steve ballmer's stock holdings are going to need some more propping up.
 
I have faith that the Zune will do better, based upon the installed base of Xbox users in the world. All it will take is some killer Xbox linked feature that either takes advantage of, or can be somehow linked to the Zune.
 
Because they fear the iPod and what it — and its ecosystem — may potentially evolve into; becoming a platform in its own right, particularly with the convergence of multimedia in the home.

Yes, I though about it... It was a rhetorical question of sorts, anyway. 😉

I'm also figuring they are afraid of the "Halo effect" (pun intended 😀), as that'd explain the whole shebang. They were ALWAYS afraid of losing their leadership on the PC market, and that their iron-like grip would turn loose. The problem is, they grew lazy, and are preety much aware of that, as their delays in delivering Vista prove.

"So, let's just try to find some other markets to tap into, 'just in case' ", they probably thought...

That explains the XBox, the WebTV, Windows CE, Windows Mobile, and whatnot. The Zune is just the latest iteration of that behaviour, and more specifically an attempt at stopping the advance of Apple, the iPod, and ESPECIALLY the Mac/OS X platform (while your theory certainly seems interesting, iTV won't be such a threat to Microsoft as it'll most likely be fully compatible with a Windows PC running iTunes, as are the iPod and Airport Express... But it's a valid point, nonetheless 😎 ). iPod+iTunes users can buy a Mac and keep using their nice Apple gear (and even Windows if they really must), while becoming hooked up to the rest of their iLives at the same time, whereas Zune users... well, they can hook up in basements and squirt around, and that preety much sums it up. Or they can suck up and throw them in their drawers and buy an iPod "the next time", which is the most likely scenario.

So this seems to be just a desperation move by M$, in anticipation, but the media (or the market, for that matter) doesn't really get it... In preety much the same way that they didn't get it in 2001, when the iPod was initially launched. <manic speech> Five years from now, we'll be laughing our a**es off at yet some other random M$ failure, and fondly remembering the Zune as the beginning of the end. Muhahahahaha </manic speech>... 😛
 
Why are we still talking about the Zune. Does anyone really care? It's just another mp3 player among so many others behind iPod. 🙄

It will never match the iPod's popularity, ever.
 
MS did sell the Xbox at a loss. They were still losing money at $299 a pop and had to lower to $199 to keep up with Sony's unexpected price drop the spring after it came out. I seem to remember that the per-unit cost to make an Xbox was somewhere around 420-450 per unit.

However, MS did some things very well with the Xbox that caused it to succeed. First, they bought a lot of game developers to create games for it. They struck gold with Halo, and that alone caused a lot of people to buy it.

The second was the built-in hard drive, which allowed for expanded functionality in games as well as an end to costly memory cards being required.

The third, and biggest, was a true innovation in online play. Xbox Live was the first system to standardize online names, messages, and supported technologies across a whole set of games. MS was the only player that took online seriously, and they capitalized, big time. Nintendo still really doesn't care, and Sony has effectively copied MS's innovations for PS3. MS didn't invent online play, but they brought it to the masses in a way that was easy and fun. Slice it any way you want it, MS really innovated and executed Xbox Live.

Xbox relatively succeeded for those reasons. However, all of those things are virtual non-factors to the Zune. Zune (as of now) has no exclusive content, it has no revolutionary built-in feature, and has no real huge innovation to the way music is listened to, or a better execution thereof. All it really has is a stretched iPod-res screen, and very limited Wifi connectivity between Zunes.
 
It may not be true that they broke even, it's just something I thought I heard on a tv interview...

I suspect its all in the definition, I'll bet the "Xbox Division" broke even, which would be a very different thing because that would mean the video games and licensing made enough money to balance the losses from the console. Of course make those games for the PS2, and they would have been profitable instead of break even, but that wasn't the point. The point was to gain foothold in a new market.

Sony is selling the PS3 at a loss as well, Nintendo I'm sure is making money on the Wii...

I don't think I'd hold up Sony as an example of how to innovate and market -- they lost their focus decades ago. Aside from the walkman, let's see what products has Sony pushed in the last 30 years...

Beta
MiniDisc
Memory Stick
ATRAC

Now we sit back and see if the PS3 and Blu-Ray follow the recent trend. If we're comparing Microsoft to Sony that's what you have to look forward to.
 
Because they fear the iPod... and its ecosystem...

This is key for sure. The success of the iPod is directly attributed to its integrated "ecosystem" as you put it. iTS, iTunes, iPod.

Slowly but surely, with movies, photos and games - and MUCH talk of cell phone syncing with iCal, Address Book and iApps - Apple is attempting to tie iLife & OS X into the equation... making it a critical and integral part of that ecosystem.

If people wanted the full iPod experience, they NEEDED iTunes... so they adopted it. In the future, with product XYZ, people will NEED OS X for the full experience... and they will adopt it.

THAT is what MS fears about Apple/iPod. They could give a rat's ass about the portable music/media market. They just want desperately to kill the iPod and what it means for MS's future.

In my opinion, they should've undersold by $50+/unit. At their current rate, they'll never penetrate the market.

-Clive
 
one of the key differences between the xbox and zune. is that microsoft only had to contend with 2 other players in the video game indistry. the ipod maybe top. but there are hundred of other companies to battle first just to reach second place. and also phone companies. spending money maynot help them like in the case of the xbox.

The main difference (as I understand it) is that MS can at least attempt to make up for their losses on the sales of xBoxes from the games that are licensed for xBox. They can't do the same with music for the money they're losing on each Zune sold. Apple's margin on music is slim; they make money on the iPods.
 
It may not be true that they broke even, it's just something I thought I heard on a tv interview...

Sony is selling the PS3 at a loss as well, Nintendo I'm sure is making money on the Wii...

There was also a lot of buzz for the 360 a launch & after, MS has sold over 15 million XBOX 360's in the last year, so I think they have done pretty well....

I don't think Sony has the best plan, if they did they would have launched earlier, had more units at launch & not be so overpriced...

Actually, I'll make some corrections for you:
Sony is losing $241 (source: iSuppli) on each PS3 at RETAIL pricing. We all know that Sony sells to distributors who sell to retailers, all of whom profit, so if you accept a 30% combined margin you are talking well over $300 loss per console. Their games are also in the $70 range to make up for it.

iSupply also states that the xbox 360 costs $323 for the premium unit to build; at $76 less than the retail price. After the channel margins are taken out, Microsoft is breaking even. Microsoft is already a year into things, and is about to release a cheaper xbox 360 using 65nm parts, which will save them even more. All in all, Microsoft is looking fairly good this time around for turning a profit. Infact, in an interview this past week I read that the Entertainment division would have turned a profit this year if it wasn't for the Zune.

As far as # of units sold:
XBox sold 27 million units
Xbox 360 has sold 7 million so far, and Microsoft expects to sell a total of 10 million by year end.
Sony has sold 200,000 units in the US, and won't hit 400,000 at year end.
Wii has sold 400,000 units, and will hit an estimated 4 million by year end.

The Xbox 360 and Wii also both have very high software attach rates (I've bought 5 titles already for my Wii); and Microsoft i'm sure is making a killing on Live.
 
People forget that MS has dominated pretty much every market they enter. Whether it be PDAs, PC desktops, Office software suites, internet browsers, and gaming (did I miss any other markets?). Yes, in almost every instance, their initial products leave much to be desired(XBOX+Halo excepted) but they pretty much rose to the occasion and soon took over the market. Partly because their competitors don't respond to MS's moves. Zune, in its current iteration, does not scare me, but if Apple decides the status quo is cool, then the ZUne could become a force. However, I doubt that Apple will stay seated. Com'n iPhone, vPod, PodCar, whatever!!! 😛
 
Is anybody surprise by this?
Seriously we knew this all along.
Plus, what surprises me is that Microsoft did no TV advertising for the Zune at all. So many people out there have no idea it even exists.

Zune has no chance until they have an integration like ipod and itunes have. Maybe in Vista they will have a chance to get that but my feeling is too late for them.
Apple will not let down and I am pretty sure before spring we'll see updates across the ipod line and maybe finally the widescreen ipod.

I saw a zune ad on TV the other night. The same sweaty teenagers as in every other Zune ad. This time they were breaking through a fence or something. Then "Welcome to the Social" appeared over it. I don't think they showed the actual Zune at all.
 
I have no idea where you got that one from. The original Xbox never made a profit. Microsoft is deliberately selling the Xbox 360 at a loss to capture marketshare. However, the PS3 and Ninetindo Wii are selling like hotcakes, are latest big things, and have the buzz. The best laid plans ...

No real, true, stats on that one yet. Moving on...

However, the one thing I'm amazed at... The EU has this whole 'Anti-trust' thing going on with M$ at the mo...

How can this company, legally, be allowed to sell their product at a loss with the sole intention being: capturing market share? Isn't this: putting £€$ behind a product to guarantee a products sucess ( & break smaller companies, not nessecarily Apple) : hugely illegal, and destroying consumer choice? Whether it be Zune, XboX whateva... 😕

I'm amazed that this practice is tollerated, let alone endorsed by the music lables, and their little $1 per Zune thang... I thought they were worried about APPLE being in control, never mind M$.... 😱
 
As far as # of units sold:
XBox sold 27 million units
Xbox 360 has sold 7 million so far, and Microsoft expects to sell a total of 10 million by year end.
Sony has sold 200,000 units in the US, and won't hit 400,000 at year end.
Wii has sold 400,000 units, and will hit an estimated 4 million by year end.

Console sales

Go Wii!
 
I don't think I'd hold up Sony as an example of how to innovate and market -- they lost their focus decades ago. Aside from the walkman, let's see what products has Sony pushed in the last 30 years...

Beta
MiniDisc
Memory Stick
ATRAC

Now we sit back and see if the PS3 and Blu-Ray follow the recent trend. If we're comparing Microsoft to Sony that's what you have to look forward to.

Sorry to have to say this, but the Playstation and PS2 (early years) were a great success.

The PS3 was late, but it is still too early ( like the Zune) to discount it as a good device or threat.
 
What I meant by moderately high ante was the dollars spent, not the product.

I don't think we'll know what MS executives will do when Gates leaves until he's gone. Even Mr. B.

Don't get me wrong - I think the Zune is crap. However it's always foolish to ignore the 800 pound gorilla, even when it's lazy and clueless. They can wake up and buy clues.

Yes, of course... that "gorilla"-thing is a fairly good point. But don't forget about that pervasive M$ corporate culture. I'm not talking about laborious employees, like programmers or designers, which are mostly very talented people (it's not their fault - at least, not of all of them - that they have to deal with dumb business decisions and craptastic 10-20-year-old-code). I'm talking about management, which, as it seems, is quite rotten at Microsoft, and probably not just at the core. And to make things worse, there is no "Jobs" waiting on the wings to salvage Microsoft from itself, and that will be the sole reason why they won't last long (would've Apple had, if not for Steve and NeXT?)...

As for buying clues, sure! Maybe they'll hire someone from outside. But naaah, they're too proud to change their ways, I guess... They didn't do it in 20 years time, so why would they now? Sure, the XBox was a small glimpse of "innovation" (albeit not THAT useful for their survival as a company), but meh, a bit lackluster while compared with iPod+iTunes (which, ironically, were partly developed by outsiders) and the effect they had on Apple...

And as for their investment, I STILL don't get it! I mean, they didn't even bother about condensing the Zune to be more attractive... Is its thickness a side effect of having a WiFi chip inside, or a reflex of M$'s design team's incompetence at "refreshing" a 3rd party product? Was it an item SO EXPENSIVE to "develop"? And they didn't took the steps to develop an interesting alternative to the click wheel, anyway. AND its interface, from what I can tell (I haven't had the chance to try it yet, as I live in Europe... 🙄 😀 ), is nothing special, it's just an iPod-like menu scheme with some wallpapers plastered underneath it... Big deal!

Look at the nano and the shuffle (and even the 5G). Now there are some examples of some impressive and probably expensive industrial design...
 
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