Microsoft Sets Zune Price

Microsoft's much-anticipated Zune digital music player will go on sale Nov. 14 at a price that matches Apple's category-leading iPod.

The 30-gigabyte Zune will retail for $249.99, just 99 cents higher than the iPod with the same amount of storage. Downloadable songs will sell for about 99 cents each on the Zune Marketplace, a price that matches Apple's iTunes store.

Microsoft also will offer a Zune Pass subscription service, which will let users listen to any of about 2 million songs for $14.99 a month.

As expected, the low price means that the Zune, like the Xbox 360 game console, will be a money loser -- at least initially.

"We had to look at what was in the market and offer a competitive price," Scott Erickson, Microsoft's senior director of product marketing for Zune. "We're not going to be profitable this holiday, but the Zune project is a multiyear strategy," he told Reuters.

Shares of Microsoft were recently up 5 cents to $27.49; Apple shares were up 47 cents to $76.88.