Microsoft’s Ballmer: Zune device not money loser, wishes Apple’s 30GB iPod was $299 instead of $249

Microsoft CEO Steve Ballmer chats with BusinessWeek editors about Web 2.0’s sky-high valuations and the new competition the company faces.

Some questions and answers involved Apple:
BW: Who are Microsoft’s top competitors?
Ballmer: Guys who can touch us in multiple places probably matter more than guys who can touch us in any one place. And actually we don’t really have our big competition from any one company. Any one company, we know how to compete with… there are cases where software gets monetized through hardware. That’s what an iPod is. iPod is a software thing. You just happen to collect the money on the hardware.

BW: Does Zune fit into the hardware piece of this?
Ballmer: Sure it does. Because the value of Zune, if we’re successful, is all in the software. It’s in community [the ability to share music and pictures with other Zune users]. I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That’s a software experience. The truth is, though, if it makes money, it will be built into the gross margin on the hardware. We’ll figure out how to make money on the community perhaps later though advertising or other means.

BW: How much money will you lose per Zune?
Ballmer: None. Apple put the hammer down there, dropped the price down to $249. If they had been $299, it would have been nicer. They have the advantage of scale. So we’re at $249, too. We don’t make a lot of money, not to start out.

Full article here.
Chunky Zunes can squirt brown, er.. brown Zunes can squirt chunks? What’s chunky and brown and squirts, again? Each Zune should come with a free bottle of Kaopectate in the box. And, excellent business plan you have there, Balmy: “If it makes money… We don’t make a lot of money, not to start out… We’ll figure out how to make money on the community perhaps later.” What a joke.

Related articles:
Microsoft’s consumer electronics track record: long string of failures – October 11, 2006 founder: ‘Zune will be an expensive failure for Microsoft because consumers aren’t stupid’ – October 06, 2006
Microsoft fails to secure key Zune domains – October 04, 2006
Microsoft rigs Zune with tricky pricing and proprietary money schemes – October 03, 2006
Why Microsoft’s Zune won’t kill Apple’s iPod – October 03, 2006
10 Apple iPod vs. Microsoft Zune myths – October 02, 2006
Analyst: Zune could lead to ‘civil war’ between Microsoft and Windows Media partners – September 29, 2006
Thurrott on Microsoft’s Zune: ‘The makings of a disaster, what the heck are these people thinking?’ – September 29, 2006
Analyst: Microsoft Zune’s as good as dead on arrival – September 28, 2006
Microsoft sets 30GB Zune price at $249.99 – September 28, 2006
How Microsoft’s Zune can kill Apple’s iPod – September 21, 2006
Microsoft’s Zune insanity – September 21, 2006
The Microsoft Zune 1.0 dud – September 20, 2006
Microsoft’s underwhelming Zune a ‘viral DRM’ device – September 18, 2006
SanDisk teams with RealNetworks against new common foe: Microsoft Zune – September 18, 2006
Creative does Apple’s dirty work by immediately attacking Microsoft’s Zune – September 17, 2006
Motley Fool’s Jayson: Microsoft’s ‘just plain ugly’ Zune a meager offering, not an iPod killer – September 15, 2006
What’s in a name? ‘Zune’ a French-Canadian euphemism for penis or vagina – September 15, 2006
Crave at CNET: ‘Microsoft Zune, all the excitement that brown can bring’ – September 15, 2006
Microsoft’s Zune underwhelms – September 15, 2006
Enderle: Microsoft Zune ‘a design mistake’ – September 15, 2006
Microsoft hypocrisy exposed with Zune: What ever happened to ‘choice?’ – September 14, 2006
Analyst: Microsoft Zune with fake scroll wheel ‘hardly an Apple iPod killer’ – September 14, 2006
Analyst: Microsoft Zune won’t spoil Apple’s biggest iPod Christmas ever – September 14, 2006
Microsoft unveils Zune 30GB player, Zune Marketplace; declines to disclose prices – September 14, 2006
Analyst: Microsoft’s Zune an ‘underwhelming’ repackaged Toshiba Gigabeat; no threat to Apple iPod – August 30, 2006
Microsoft confirms brick-like Zune to be made by Toshiba – August 25, 2006
Microsoft Zune is chunky brick made by Toshiba – August 25, 2006
Microsoft to spend hundreds of millions, several years on Zune trying to catch Apple iPod+iTunes – July 27, 2006
Zune: Apple cannot lose. Microsoft cannot win. – July 26, 2006


  1. ‘ipod is software thing?’ this guy has no idea how Apple ipod is very advanced technology. like he claim, why can’t MS make better one so far? so they invented anything on Zune? nothing. they borrowed hardware from toshiba, created some UI. that’s it’ UI itself. it can’t synchorize podcast, audiobook, show more pixel on screen is far lower than ipod. so how software thing is even working to MS? nada. as you know, they have been so lucky to sell out windows. they say it is sold. but it’s not. it has been bundled for every PC. so technically it’s not sold. without major update, windows has been gone to 8 years. software, hmm.

    I think that MS should make only mouse, Xbox 360. that’s all.

  2. Interesting post on Businessweek:

    “Nickname: Avocado
    Review: Microsoft is paying attention. Pause to think about it. The Zune is going to be the new consumer computing device. You can Skype with it, make documents using voice with it, take pics and videos with it — and it will tie together with by allowing you to upload all your content to some remote server. The Zune is to a mug of water what is to the ocean (or a giant lake, since you’d have to filter the salt water before drinking it). [Your home PC is a tub/tank of water, in this analogy — but do you really need to store water in a tub/tank if you have a running connection through your faucet?)
    Date reviewed: Oct 11, 2006 4:19 PM”

    What a lot of bollocks!

  3. “I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation.”

    I officially want to throw up now. That is an image I didn’t want stuck in my brain. Ballmer squirting ANYTHING is disgusting. >.<

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