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Microsoft Reports Zune Profits Way Down

By - Source: Tom's Guide US | B 6 comments

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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  • 0 Hide
    crockdaddy , January 26, 2009 7:21 PM
    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"
  • 0 Hide
    MrF430 , January 26, 2009 8:17 PM
    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...
  • 0 Hide
    2GooDrumr , January 26, 2009 8:37 PM
    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
  • Display all 6 comments.
  • 0 Hide
    ravenware , January 26, 2009 9:50 PM
    The Zune seems like a nice player and a good alternative to the iPod or Zen. I believe Microsoft needs to do a better job of marketing it.
  • 0 Hide
    nukemaster , January 27, 2009 12:24 AM
    I fully enjoy my Zen :) 

    I was looking at zune(I honestly did)

    I just like the way Creative(well at least the 2 I have had) players sound(I had a Zen Microphoto and now a Zen 16gig, more then enough for just music, i have 2 16 gig SDHC cards for anything else i want to carry with it)
  • 0 Hide
    Kami3k , January 27, 2009 4:46 PM
    I just can't see the big deal over the ipods. Practically ever other major MP3 player is better, from Creatives MP3s and the Zune.

    But I do agree ravenware, microsoft needs a new way to market it as "Welcome to the social" is incredibly weak against Apple's marketing.
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