Microsoft Hopes Price Cuts Will Help Zune in the Holiday Season

Today Microsoft has announced price reduction for flash-based models of its music player and iPod competitor Zune. Of course it is quite understandable that everyone is looking for some ways to keep sales coming even when everything people think of is the financial crisis everywhere.

To be specific, Zunes will now be sold for $99 (4 GB version), $139 (8 GB version), and $179 (16 GB version). The most important thing here, of course, is the fact that these prices put Zune ahead of similar version of iPod Nano so it is supposed to help Microsoft compete with Apple and its famous music players. But I tend to agree with MG Siegler that consumers will still choose iPods simply because Apple’s device is a standard for music fans.

Another thing that seems to be important is that the 4 GB version is now priced below the important $100 mark and that could be what really matters to some consumers making a decision on a gift that should be priced comfortably up to $100.

The changes will be effective as soon as tomorrow in the US and on Friday in Canada. In addition to cutting prices, Microsoft has also launched a large-scale advertising campaign (both on TV and online) to encourage people to download free Zune software.

But unfortunately Zune (or any music player at that) can hardly be considered as a necessity and only rare people who are confident they will still have their jobs in a few months time will even consider buying the device. Unfortunately, time is not particularly right for anything luxury so any company that is willing to have a good holiday season should better focus on something consumers actually need - preferably also offering some bargains on what they would have bought anyway. But when it comes to Zune, it will have to compete with two strong players - Apple iPod and financial crisis - and it’s hard to say which one is more dangerous.