Digital Home Thoughts: Microsoft Building iPod and PSP Killer?

"In a bid to capture the huge audience for handheld entertainment gadgets, Microsoft is designing a product that combines video games, music and video in one handheld device, according to sources familiar with the project. The Microsoft product would compete with Sony, Nintendo and Apple Computer's products, including the iPod. And Microsoft has some of its most seasoned talent from the division that created its popular Xbox 360 working on it. Game executive J Allard leads the project, and its director is Greg Gibson, who was the system designer on the Xbox 360 video game console. Bryan Lee, the finance chief on the Xbox business, is leading the business side of the project."

This news has been bouncing around the 'net this past week, but I held off on posting about it to see if any further details were revealed - they weren't. Everything is pretty much vague at this point - we know that a group of Transmeta engineers were hired by Microsoft for a secret project, and when Microsoft hires hardware engineers that specialize in lowering power consumption on portable devices, you know that Microsoft is working on some hardware.

Few people realize that Microsoft has hardware guys for many of their groups, such as Windows Mobile, but they mostly work on reference designs and try to encourage the OEM partners to come up with better designs. This case sounds different - it sounds like Microsoft is going to release a device themselves, which is very exciting. Why? Because Microsoft makes quality hardware - everything from their (now discontinued) networking products and joysticks, to their current keyboards and mice, has always been top-notch in terms of design, aesthetics, and build quality. So in many ways Microsoft understands hardware better than their partners who are supposed to be the real experts. This makes for an interesting scenario!