Microsoft Zune Finds An iPod Killer (MSFT)(AAPL)

Count on Microsoft to be as clever as the devil. The new Zune business model will turn Apple on its ear. Microsoft will give Universal Music a cut of the sales price of each Zune sold. Apple only gives content providers a piece of the downloaded music or video.One of the reasons that model is attractive to music companies is that much of the content on most iPods comes from ripped CDs. In that case, the music publisher gets nothing. Microsoft has found a way to make sure each music firm is assured revenue from the Zune.The ball now goes to Apple’s court. It does have over 70% of the share in portable multimedia devices, but music companies are somewhat ambivalent about the device. It gives them huge distribution, but Apple keeps most of the revenue pie.Apple will probably see no need to counter Microsoft’s move immediately, but if the music industry warms to it, MSFT may find itself in the role of preferred provider to entertainment companies that think its revenue model is more attractive.And, that could be tough for Apple.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.