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December 19, 2005

Buzz: Microsoft to build own iPod?

Posted by David Hunter at 12:11 PM ET.

Todd Bishop of the Seattle PI notes the rumor at Barron’s:

There is chatter on Wall Street that Microsoft may be readying a new hardware initiative by producing its own digital media player to garner a piece of the market that Apple’s iPod has defined.

Drew Brosseau, an analyst at SG Cowen, says he believes that Microsoft will — and should — build its own digital media device. There are at least some intriguing hints that the brass in Redmond, Wash., are moving toward giving the go-ahead to such an effort.

Brosseau thinks Microsoft strongly wants to enter the online music business and to explore the software/hardware/service nexus. The analyst also points out that, with the recent release of the Xbox 360, Microsoft has a hardware-design group with time and energy to spare until the next videogame hardware cycle.

This isn’t necessarily a profound threat to the iPod juggernaut, which has enormous momentum. But the $8 billion digital music and media business — growing 15% a year — includes $2.5 billion of non-iPod revenue, much of which Microsoft could sop up with a strong entry in the segment, says Brosseau.

That’s not a major slug of cash, in the context of the software giant’s expected $45 billion in revenue this year. But it fits with the company’s desire to layer on products in fast-growing businesses not tied to the PC cycle.

More by following both the links. Aside from the question of the return to Microsoft from trying to crash the portable media player market, such a move would be exceedingly inconvenient for Microsoft partners already producing players based on Microsoft’s Windows-centric Portable Media Center specification. The folks at Creative, Samsung, and iriver are going to be more than a little grumpy if Microsoft tries to elbow them out of the way. On the other hand, their players haven’t been a rousing success and perhaps with a little “coaxing” they would be willing to leave the field to Microsoft. And of course, if the Xbox crew runs the effort, the Microsoft player wouldn’t necessarily be Windows-centric.

Update: Rick Aristotle Munarriz considers the pros and cons at The Motley Fool.

Filed under Apple, Coopetition, Creative, Digital Media, Portable Media Center, Samsung, Technologies, Windows Mobile, Xbox, iriver

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4 Responses to “Buzz: Microsoft to build own iPod?”

  1. Microsoft News Tracker » Buzz: New Microsoft media player, media deals at CES06 Says:

    [...] Everyone is wondering what Microsoft has up its sleeve for the Consumer Electronics Show (CES) scheduled for January 5-8 in Las Vegas. There’s been talk of a “Microsoft iPod” and we know there will be an announcement with MTV. Now (via Multichannel News has more details: Microsoft Corp. plans to ring in the New Year, with a fresh campaign to make its Windows Media Player the dominant way to deliver downloadable content to television sets, personal computers and handheld devices. [...]

  2. Cool Tech Reviews » What about Portable Media Centers? Says:

    [...] Microsoft News Tracker mentions a rumor that Microsoft is planning to build their own iPod or more precisely, an “iPod killer.” Aside from the advisability of Microsoft going head to head with Apple in the portable media player arena, it would also seem to create difficulties for Microsoft partners Creative, Samsung, and iriver who have built players based on Windows Mobile using Microsoft’s Portable Media Center specification. [...]

  3. UnlimitedSearchenginesBlog Says:

    Forecast : Microsoft to Have Own Music Services?

    Microsoft News Tracker » Buzz: Mic…

  4. iPod Killer update -- Microsoft News Tracker Says:

    [...] Music industry executives in particular have complained about Apple’s control over the digital music market and its power to determine pricing of songs and albums. And the fact that Microsoft’s previous hardware partners for the Portable Media Center specification and related media player software would be getting the shaft has begun to attract notice: The shift is likely to anger Samsung, Sony, Creative Technology and other manufacturers that were persuaded to use Microsoft’s software in their devices, because a Microsoft player would compete with theirs. It’ll probably get smoothed over, but it does make you wonder how Microsoft feels about its personal computer partners. Filed under Coopetition, Digital Media, Technologies, Hardware, Sony, Portable Media Center, Media Player, Creative, Samsung, New Form Factors, Microsoft   [Permalink] [...]

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