Jimmy Daniels of RealTechNews writes:

Microsoft announced the pricing on the Zune media player today, as well as how much the songs from its service will cost. It is going to take a loss on selling the device, saying it’s not going to be profitable this holiday season, but the Zune project is a multi-year strategy.

Microsoft’s 30-gigabyte Zune will retail for $249.99 - 99 cents higher than the iPod with the same amount of storage - when it goes on sale November 14. Songs available for download at the Zune Marketplace service will cost about 99 cents a song, on par with prices at Apple’s iTunes, Microsoft said.

The Zune aims to compete on features, not price, said an analyst. “They’re not getting into a pricing war,” said Michael Gartenberg, an analyst at technology and media research firm JupiterKagan Inc.

“It will be a competition of features versus features, form factor versus form factor, winning the hearts and minds of consumers with something other than price,” Gartenberg said. [Source: Yahoo! News]

We Say: Sounds like it is taking the same approach that it does with the Xbox: Get the consoles out there and make money on the accessories and the games, or in this case, songs. But with recent reports coming out that Apple makes all of its money upfront on the iPod, and not many people actually purchase music from the company, it makes you wonder exactly how many years Microsoft is going to give this strategy.

Added: More info available here and from the Microsoft press release.

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