[Keyboard Cowboy]

http://www.crn.com.au/story.aspx?CII...edate=20060706

Microsoft to have iPod rival out by Christmas

Microsoft will start selling a digital music and video player to compete with Apple's iPod by Christmas, sources said.

The company is also said to be planning to have a wireless feature on the new player to enable the downloading of music and videos over-the-air by users, according to one source.

Microsoft has been touting the new player to record companies in the last few weeks as well as a new integrated media software application developing a system akin to Apple Computer's iPod/iTunes integrated ecosystem.

"They're proposing an iTunes model approach, another source said. "They're now interested in controlling the whole vertical stack of technology from the device to the service to the software."

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 nearly 70 percent of digital music sales in the U.S.

Analysts believe that the Apple's simple approach to providing an integrated seamless ecosystem for digital media has been key to Apple's success and think that Microsoft now wants a more significant stake in that market.

Does the world really need another iPod or iTunes?
And just in time with Windows Vista and it's Castapo Digital Rights Management.

[Keyboard Cowboy]

Microsoft's iPod rival a pricey investment

Microsoft plans to go head-to-head with Apple for a piece of the portable music device market, but it doesn't expect to be an overnight sensation in the field.

"This is not a six-month initiative, where somehow in six months we will have captured the marketplace," Microsoft Entertainment & Devices Division President Robbie Bach said Thursday. "This will be a four-, five-, six-year investment horizon."

At the company's annual financial analyst meeting, Microsoft executives described its under-development Zune brand as a line of hardware and software for mobile entertainment, both music and video.

The company has offered few details on what form or features its initial Zune devices will offer, but executives say that a wireless Internet connection will be built in.

Microsoft isn't aiming to simply recreate the iPod experience, according to Bach.

"We're not just doing Zune to copy what others have," Bach said. "We think there are real advantages to what Microsoft has to offer here."

YouTube may be as much of an inspiration to Microsoft as the iPod. Bach cited video search as an area where Microsoft hopes to differentiate itself, by enabling users to seek out and recommend to each other multimedia content.

Social networking will be another focus for Microsoft, Bach said, pointing to Microsoft's experience in building the Xbox community.

Key developers from the Xbox team have been shifted to the Zune project, Microsoft CEO Steve Ballmer said in a later speech. Microsoft's dependence on their expertise forced it to hold off on initiating Zune until after it shipped Xbox 360, he said.

"I wish we'd had the capacity to do Zune a year earlier," he said.

Ballmer also acknowledged that Apple's iPod is a daunting rival.

"There's no other company - for better or for worse - that would be trying to get into that business at this time," he said.

"Nobody else has the optimism, nobody else has the financial resources."

Microsoft executives said Zune will be a partner-friendly play; other companies will be invited to build around the Zune brand and platform.

The company's current digital entertainment partner and branding program, PlaysForSure, will be unaffected by Zune's launch, Bach said.

"We're going to encourage people to continue working with PlaysForSure and the interfaces that interact with Media Player and all the technologies that are in the core platform of Windows," Bach said.

"We're going to keep working with our partners on those fronts and hope that, between what we do on PlaysForSure and what we do with Zune, we can scale the Windows ecosystem."

Microsoft plans to sink hundreds of millions of dollars into building Zune over the next few years, but the investment won't be of the same pricey magnitude as its Xbox foray into console gaming.

Executives projected that Microsoft's gaming division will continue to lose money this year, but will finally turn profitable in Microsoft's 2008 fiscal year.

Pulled down by the cost of investments like Zune, the entertainment division is forecast to continue running in the red ink for the foreseeable future.

At least with the game consoles, there was a noticable difference between Nintendo, Playstation and X-Box. However when it comes down to MP3 players, there is really not more or less that they can do.
iPOD got a extremely good market share where one out of 3 MP3 players is an iPOD. Plus there is the iTUNES that downloads in a priority format that only works in iPODs.
The only other 2 that I see that come close on the market are your things like Creative and iRIVER offerings. After that, there is a lot of other companys that are doing the media players, but they are rather unheard off.
Microsoft might have the house hold name, however unless Zune can offer some thing rather unique, it's obvious that Microsoft as money to burn.

In all honestly, Microsoft should just stick to the computer and software markets, and leave it at that. I am sick and tired on seening out they want to creep into other aspects of our lives.

[alexsabree]

lol i think its great, microsoft is pretty much the richest company out there, and they are limitless. When they expand to different markets it only makes it possible to make the product better.

The only way they could start a revolution in teh mp3 market is by making the wireless connection cheap, and accessable
Other than that, all mp3 players will be alike

[The Future]

This is going to start getting annoying if Microsoft is going to also offer its own audio format (like the iTunes format) that can only work on the Zune. There are just gonna be way too many audio formats out then. And it's so easy to convert to MP3, anyways.