Microsoft Music Player to Take on Apple's iPod
Jul 24, 2006
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Microsoft Corp. said on Friday it has plans to launch a music and entertainment player and accompanying software under the "Zune" brand this year, in a belated attempt to challenge the dominance of Apple Computer Inc.'s iPod player, according to Reuters.

The software maker faces an uphill climb in closing the gap on Apple's iPod media player and iTunes Music Store, the runaway leaders in their respective areas. The iPod holds more than half of the digital media player market, according to research company NPD, while iTunes accounts for over 70 percent of U.S. digital music sales. In the U.S., the iPod has more than 75 percent of the digital music player market, according to NPD.

Music industry sources told Reuters earlier this month that Microsoft disclosed plans to be in the market before Christmas with a media player that will allow users to download videos and music wirelessly.

It will also try to replicate Apple's simple approach to providing an integrated, seamless ecosystem for digital media, seen as the key to its success with iPod/iTunes, the sources said. Sony Corp. introduced a music service as well as its own software and player, which has to date failed to dent Apple's share of online music sales or sales of the iPod.

Microsoft did not disclose pricing for the media player or whether it would be willing to take losses on the hardware to make money from the sale of music, video and possibly games. This is the strategy it adopted with Xbox game console.

Microsoft sources said Robbie Bach, president of Microsoft's entertainment and devices division, is working with J Allard, vice president of its Xbox team, on the digital media player/software project.

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. His involvement suggests that gaming might be part of the media player. Analysts also said Microsoft will be very aggressive marketing the product as it did with the Xbox.

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