Microsoft's Zune strategy revealed

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Microsoft has predicted that it will take up to five years of investment before their Zune digital music device begins to pay off.

It’s planning to spend hundreds of millions of dollars to challenge Apple’s iPod/iTunes combo, and is prepared for long-term investment.

Robbie Bach, head of the compay’s Entertainment and Devices Division, said that the Zune brand is essential to Microsoft’s overall entertainment goals, probably having tie-ins with other products and services such as Xbox, Media Centre, and Live Anywhere.

It looks like it will be early 2007 before Zune hits Europe.

Some analysts believe that Microsoft will go for a subscription-based model for its music service, in direct contrast to the iTunes model of single track purchases.

Zune itself remains a bit of a mystery: wi-fi and a hard drive is all we really know so far.

Andy Merrett