Microsoft will start selling a wireless digital music and video player to compete with Apple's iPod by Christmas, according to a reuters report, citing sources close to the matter.
The new player, which Microsoft has been touting to record companies in the last few
weeks, will let users download music and videos over the air, according to one source, a
feature which would give it an edge over the iPod.
Microsoft has also been showing a new media software, developing an application akin to
Apple's iPod/iTunes integrated ecosystem, according to another source.
Record companies are expected to be receiving prototypes to test in the coming weeks,
said the first source. The sources said Microsoft will be throwing significant marketing
dollars behind the launch.
Both Apple's iPod player and iTunes Music Store are runaway leaders in their respective
market sectors. The iPod has more than half of the digital media player market,
according to research company NPD, while iTunes accounts for over 70 percent of digital
music sales in the U.S.
Robbie Bach, appointed president of Microsoft's entertainment and devices division in
December, is working with J. Allard, vice president of its Xbox team, on the unnamed
digital media player/software project, according to a source close to Microsoft.
Allard's involvement is seen as significant because he is one of the few executives at
Microsoft with experience in launching a consumer electronic device from scratch with
the X-Box gaming system.
Analysts believe that for Microsoft to have any chance of competing with Apple in the
next year, the software giant will need to have a player and service ready in time for
the Christmas season, seen as crucial for the success of any consumer electronics
Apple's simple approach to providing an integrated, seamless ecosystem for digital media
is seen as the key to its success with iPod/iTunes.
Microsoft's ability to control both the hardware and software in such a project gives
the company an edge. Japanese Sony had a similar approach. They owned content, devices,
software and an online store. However, it hasn't enjoyed nearly the success Apple has.