Are you so sure?  With iPod, at least, Apple has made it extremely difficult for competitors to undercut them.  For example, they got bigger discounts from RAM suppliers than any of their competitors, because they were placing a bigger order.<p>Quickly googling "zune prices" and "iPod prices" right now, for example, I see a 32GB HD Zune listing for $269 and 32GB iPod touch for $259.  Microsoft can't even by the crappier, but cheaper version in the market because they don't have the scale in this market that Apple does.