Software giant Microsoft Corp. is laying the groundwork to compete against Apple Computer Inc.’s iPod digital entertainment device and iTunes service, sources familiar with the discussions and plans said on Friday.
Microsoft has held licensing discussions with the music industry to create its own music service, the sources told Reuters.
The Redmond, Washington-based developer of software that runs most of the world’s PCs is also demonstrating an entertainment device that plays videos and music, the sources said.
It is unclear when Microsoft plans to launch, they said.
The significant part of the rumor is Microsoft planning to do it all themselves like Apple, instead of yet again taking the failed route of “enabling partners” with hardware specs and software.
Update: Kenneth Li has an expanded report at Reuters which, not unexpectedly, touts Robbie Bach, President of the Microsoft’s Entertainment and Devices Division, as the executive in charge of the effort.