Rumors About Microsoft's 'iPod Killer' Gain Steam

Rumors about Microsoft's (Nasdaq: MSFT) plans to introduce a device to challenge Apple's (Nasdaq: AAPL) iPod have reached critical mass as tantalizing details -- the device will have wireless capability; it will be on store shelves for the Christmas season -- make their way into press reports.

Music and entertainment executives have been briefed on Microsoft's plans in anticipation of the "iPod killer's" coming launch, according to the latest accounts.

Media Player's Role

Of course, Microsoft has approached this market before, albeit sideways, through its Windows Media Player software. The latest version, still in beta, comes closer to emulating the iPod-iTunes model than anything Microsoft has previously offered.

Besides managing digital music on PCs and on a variety of mobile devices, Media Player 11's default integration is with Urge, a new online music service developed by Microsoft and MTV Networks. Previously, Windows Media Player gave equal access to compatible music services.

"Microsoft is clearly trying to stack the deck against Apple, and its relationship with MTV is only the beginning," Joe Wilcox, senior analyst with JupiterResearch told MacNewsWorld. "Up until now, it has treated its media player as neutral territory."

Dark Horse

Unlike other online music endeavors, Urge is viewed as a possible serious competitor to iTunes, considering MTV's marketing power and the fact that it doesn't need Urge to be a core revenue-generating service.

Microsoft apparently is not waiting to see if Urge and Windows Media Player 11 can make a dent in the market. It is unclear whether it has a new product under development already or is partnering with a company to create a new device.

Microsoft is manufacturing more hardware than usual these days, of course, having successfully produced Xbox and LifeCam. A partner, however, could bring to the table some of the aesthetic design capabilities Microsoft would need to woo the iPod crowd.

"Of those two options," Wilcox says, "working with a partner would be more ideal for Microsoft, I believe, for a number of reasons. All around, it is less risky."

Lacking Synchronicity

Another consideration is that -- despite recent improvements -- Microsoft's track record with Windows Media Player has been rocky. It still has its problems, Wilcox observed.

"My experience when testing it is that when mixing content from music sources, there is invariably a problem."

Whatever Microsoft does next in this space, Wilcox said, it has to be able to deliver the whole package. "It shouldn't be just a music device."