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Microsoft’s Ballmer: Zune device not money loser, wishes Apple’s 30GB iPod was $299 instead of $249
Wednesday, October 11, 2006 - 12:48 PM EST

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.

MacDailyNews Take: 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.

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Related articles:
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Reader Feedback: ( = registered)

Oct 11, 06 - 11:56 am Comment from: Cubert

Technically Monkey Boy (AKA Ballmer) is correct. The Zune is not a money loser....because it doesn't even freakin' exist yet!

He's not even a convincing liar. "Oh yeah, and, um, I wish the iPod was $50 more. No real reason....just sayin'"

Oct 11, 06 - 11:56 am Comment from: gow

Squirting Zunes... scary. The problem with "squirting" a picture or a home movie, even those will go away in 3 days!! Anything shared goes away in the 3 day limit... what a crappy piece of technology...

Oct 11, 06 - 12:00 pm Comment from: Cubert

Also,
"We'll figure out how to make money on the community perhaps later though advertising or other means."

Doesn't surprise me in the least that this came out of Monkey Boy's mouth. He's all about his precious advertising revenue and monetizing ever single aspect of every single product and then act as if there is nothing wrong with it!

People want a good user experience, not viewing ads all day!

Oct 11, 06 - 12:00 pm Comment from: Devious Mind

Ballmer's gonna "squirt" something at me?

ew.

Oct 11, 06 - 12:01 pm Comment from: Brown Squirts

When I'm being touched by guys in multiple places, I squirt too. In 2 of the Zune colors.

"We'll figure out how to make money on the community perhaps later though advertising or other means."

I'm thinking "Crack Cocaine For Sure" or maybe "male prostitution"

Oct 11, 06 - 12:02 pm Comment from: iSteve

How again did HE get to be CEO?

Maybe it won't lose any money --- it is not like they have any R&D;expenses to recover!

Oct 11, 06 - 12:04 pm Comment from: Guessing

I'm thinking I don't want anything Ballmer "squirts"

Oct 11, 06 - 12:05 pm Comment from: Tommy Boy

Why would I "squirt" someone a video of my vacation or pix of my kids to their device when I could just hand them my device? No matter how good the interface that would still take fewer steps, be less tortuous, be quicker, and save battery life. What crack is Ballmer smoking?

Oct 11, 06 - 12:06 pm Comment from: tyk

You want to squirt me back a video of your vacation.... I thought it didn't play video?

Oct 11, 06 - 12:09 pm Comment from: Macaday

If I was a shareholder I would be very concerned.

This statement tells me there isn't much of a plan at all:

"We'll figure out how to make money on the community perhaps later though advertising or other means."

And he's the CEO?

Fire him.

Oct 11, 06 - 12:10 pm Comment from: Tommy Boy

BTW my guess was that a Zune will cost Microsoft about $239. So Ballmer is being honest there, they technically won't lose money. But at $10 a unit they won't be recouping their development costs either.

Oct 11, 06 - 12:12 pm Comment from: AC

OMG if he squirted anything even remotely close to me, I would feel compelled to get tested for STDs.

Oct 11, 06 - 12:13 pm Comment from: deedubya

a little too much inuendo what with "guys touching" and "squirting".

good ol' Ballmer.

Now you know they're in trouble when he says this whole thing is dependent on software, an MS specialty as we all know.

Oct 11, 06 - 12:15 pm Comment from: Wil

Remember, in Quebecois French, "Zune" means genitalia, more often than not, "penis".

Maybe in Ballmer's head, it's cool to create an instant lexicon around a product, just like hiring monkeys to create websites to build interest in the same product.


What. A. Tard.

Oct 11, 06 - 12:15 pm Comment from: the other Mark

Do I really want to have videos of your family vacation installed on my music player?

On another thought, with the Zune having Wi-Fi built in, and with all the talk of Vista calling home, how often do you think the Zune will "call home" when it is in a wi-fi zone?

This might be where the advertising pops up along with checks of your music and everything else on your Zune.

nuff said.

Oct 11, 06 - 12:16 pm Comment from: Scott

I don't want him to squirt me with anything.

Oct 11, 06 - 12:20 pm Comment from: GetReal

This guy is an idiot. Hard to believe he is CEO, but then again, anything about Microsoft is "hard to believe".

Oct 11, 06 - 12:21 pm Comment from: alfred Klosterman

This guy doesn't want to touch him ANYPLACE!

Oct 11, 06 - 12:21 pm Comment from: Lazyflies

SQUIRT!

Oct 11, 06 - 12:32 pm Comment from: BuriedCaesar

HEY! You'd better have a towel to serve with that squirt... smile

Oct 11, 06 - 12:34 pm Comment from: ron

Lick my zune.

Oct 11, 06 - 12:36 pm Comment from: edward

'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.

Oct 11, 06 - 12:36 pm Comment from: Rene

He probably squirts himself alot, to monkey boy speed!

UP and Down!

Oct 11, 06 - 12:42 pm Comment from: Macaday

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 Live.com by allowing you to upload all your content to some remote server. The Zune is to a mug of water what Live.com 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!

Oct 11, 06 - 12:45 pm Comment from: jay

I bet he's not telling the truth. He probably really wishes Vista was OS X.

Oct 11, 06 - 12:46 pm Comment from: ?what?

stroke my zune and ill squirt you lol. gawd this is too easy. omg my zune just prematurely squirted all over. :( ill pass on this me thinks. i can squirt just fine w/o a zune.

Oct 11, 06 - 12:49 pm Comment from: petervrdk

haha!

squirting... that's what Cytherea can do!

maybe balmy was thinking that the zune was perfect for squirting movies?

Oct 11, 06 - 12:50 pm Comment from: macaholic

"make money on the cmmounity" later? Somehow?
Amazes me how clueless he/they are.
Mind you, no one ever went broke underestimating the intelligence of the general public.

Oct 11, 06 - 12:53 pm Comment from: DakRoland

"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. >.<

Oct 11, 06 - 12:56 pm Comment from: DW

Microsoft needs to stop this dude from talking... Seriously.

Oct 11, 06 - 12:58 pm Comment from: gorufo

Apple makes tonnes of money raping its customers. If Zune isn't losing money, even though it doesn't have the economy of scale, you can imagine that Apple is making 200% profit on their nanos.

Oct 11, 06 - 01:00 pm Comment from: Biscuit

"You want to squirt me back a video of your vacation."

Maybe I do, but even if 2 people actually bought zunes in the world the fact remains that the 1G Zune CANT PLAY VIDEO.

Thats right. Can't play video.

See the article on it at roughlydrafted.com about the zune.

Oct 11, 06 - 01:11 pm Comment from: Ray

Honestly, the guy is an idiot. He is the reason why MS stock can't gain. His first act at being announced as CEO was to go on national TV to tell the entire world that MS stock along with other stocks, was way over valued. Maybe that was true, but in the interest of his employer, he was the last person in the world that should of made that statement on TV. Duh?

MS needs to fire this guy and hire some folks in trench coats to finish the deal on him. I am a Mac fan and I want M$ to get rid of him. It is like seeing a team you don't like get skunked 100 to 0 in the World Series...you just start to feel bad for them. I think the Apple vs. MS thing makes Apple perform better and as a user of Apple products I like the effects that competition has on my computing/music experience.

Just my $0.02

Oct 11, 06 - 01:12 pm Comment from: Whatever

He doesn't even know what he's talking about...
What a complete moron...

Oct 11, 06 - 01:19 pm Comment from: Erick Erickson

Ewww.

Balmer talks about guys touching him and squirting. That's just foul.

Oct 11, 06 - 01:21 pm Comment from: dzir

hard to look at that picture of balmer without an umbrella!!! even harder when reading him speak of 'squirt's!!! two umbrellas!!! YUK!!!

Oct 11, 06 - 01:21 pm Comment from: One guy from Finland

Micro$oft is a losing business. Apple should buy SAP AG and join the FileMaker with SAP. Then Apple could squeeze the f#ck out of Floppysoft.

MDN magic word: fact

Oct 11, 06 - 01:24 pm Comment from: B-Sabre

OK, hang on. Several people have done tear-down analyses of the iPod (including the 5.5Gs) and have estimated that Apple is making a "significant" margin on each one sold.

Where is the assumption coming from that MS is losing money on each Zune? Has somebody done a similar tear-down to look at the components? Functionally, the only real difference between the iPod (30Gb) and Zune is an FM tuner and WiFi chipset, so they should be functionally and physically similar. Is the presence of a WiFi chip alone enough to completely erase the hardware margins that iPod enjoys? Does anybody know what sort of margin Toshiba was making with their Gigabeat-S model? Does economy of scale play that big a role in Apple's ability to make a profit on each iPod?

Oct 11, 06 - 01:27 pm Comment from: Ted

Who in the hells says "squirting" to describe transferring anything? Disgusting!

Oct 11, 06 - 01:27 pm Comment from: readerX

NOTE TO MDN:::::::::: dear MDN - thank you so much for posting that tongue picture each time you run a Ballmer story. it never fails to make me laugh. you endear yourselves to me a little more for each priceless tongue post.

Oct 11, 06 - 01:42 pm Comment from: macromancer

"Apple makes tonnes of money raping its customers"

Obviously you've never been raped otherwise you wouldn't be so generous with your use of the term.

When has Apple FORCED anyone to buy anything? Never?
Freewill my friend.

Now, go back under your rock.

Oct 11, 06 - 01:45 pm Comment from: Nic

"Touch us..." "Squirt"

???

Very sexual.

Oct 11, 06 - 01:52 pm Comment from: ?

OK.. first the "licking" Ballmer pic. what the heck is that. then the all that touching and squirting talk. This is disgusting! Funny as heck but disgusting. Maybe the caption should read Steve Ballmer, CEO of "touching, squirting, and tongue lashing"?!

Oct 11, 06 - 01:54 pm Comment from: Scarbro

Squirt! What an idiot! Only Ballmer can make the Zune sound even MORE unappealing than it already is!

Oct 11, 06 - 01:59 pm Comment from: BallmerIsCrazy

A must see video: "Steve Ballmer going crazy"

Prepare to be amused.

http://youtube.com/watch?v=wvsboPUjrGc

Oct 11, 06 - 01:59 pm Comment from: Musing

You people don't know the history of squirting.

Oct 11, 06 - 02:01 pm Comment from: cultist

This Squirting thing should get plastered over the entire web.
It's priceless.

Microsoft inovation at work. Squirt!

(Could catch on for transfering porn)

Oct 11, 06 - 02:01 pm Comment from: LordRobin

Uh... The Zune can play video. It comes with videos loaded. There's just not going to be any video service at first. (Doesn't change the fact that trading home movies via clunky Zune players is a stupid idea.)

Oct 11, 06 - 02:13 pm Comment from: dogfriend

OMG. I had to stop reading when he said he was going to squirt.

ACK! Horrible mental image! Make it stop! Make it stop!

Please don't squirt anything in my direction!

Oct 11, 06 - 02:17 pm Comment from: ChrissyOne

B-Sabre-

The biggest difference between Zune and iPod is not a couple of chipsets, it's the fact that Apple sells between 8 and 14 MILLION of them a quarter, and they have supply channels that give them the best prices on components. MS has none of this, hence the higher cost to build.

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