Microsoft Reports Zune Profits Way Down

Late last week Microsoft announced the company’s quarterly earnings as well as the fact that the company was laying off five thousand people.

While the earnings are no less important, the financial details were a little overshadowed by the cutbacks in staff at the Redmond company. Rumors had been doing the rounds since just before the holidays and the confirmation made quite a splash, especially the memo from Steve Ballmer. The company was laying off 5,000 -- 1,500 now and the rest over the next 18 months. Microsoft would continue to hire during that time and net staff cutbacks would amount to about 3,000.

Now that things have begun to settle down, little tidbits about the company’s quarterly revenues are starting to get some attention, like just how much money the company’s MP3 player is making.

According to Engadget, Microsoft’s earnings report last week reported also contained a $100M decline in Zune revenue, a 54 percent drop compared to the same quarter last year. Ouch. Meanwhile, Apple during its last quarter set new records for iPods sold.

The Zune made headlines earlier this year when users’ devices freaked out when the clocks struck midnight and the December 30 turned into December 31. 2008 was a leap year and apparently 30GB Zunes didn’t know what to make of the extra day. The Zunes righted themselves once January 1 came around.

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  • I own the 80GB Zune, I know I am like only one of 10 people apparently, but I like it quite a bit. I felt at the time it was a better value than buying a "meTooPod"
  • LOL meTooPod! Thats funny! After 3 iPods that crapped out, I decided to go with the Zune 80 and will NEVER return to iJUNK! You would figure that after making so much money on the iPods that apple would sell them with some decent earphones! nope, still the same plastic pieces of white crap...
  • I got a Zune gen 3 120GB for christmas this year, I had an issue with this first model, but decided to RMA to Amazon. So far, it's thew best player I've ever used. Destroys my friends' iPods, I eve prefer it to the formidable iTouch; most apps are useless :P and anything I actually want to do thats on the iTouch is on the Zune (Games, wifi purchases, Huger HDD, screen, touch pad...). I love it