Microsoft Cuts Zune Price by $50

Microsoft Corp cut the price of its Zune digital music player on Wednesday by $50 to $199 in an attempt to rev up sales of the device competing against Apple Inc's iPod.

Microsoft announced the price cut for the 30-gigabyte player on the Zune Insider blog run by one of its employees, just hours before Apple's news conference, where the company, as expected, updated its iPod lineup with new models.

Microsoft said it had been planning the price cut "for months" and expects the lower price to lure new customers.

The world's largest software maker faces a herculean task in taking on Apple in digital music players, a category defined by its iPod, which has sold over 100 million units since its introduction in October 2001.

Microsoft introduced the Zune last year, touting its capabilities to share music wirelessly. With only the 30-GB model, Microsoft met its target to sell more than 1 million units before the end of June.

Redmond, Washington-based Microsoft is expected to introduce different Zune models before the holiday season. A Microsoft executive said Tuesday the company had nothing to announce at this time, but said its plan over time is to offer new Zune models and roll out the devices in new markets.