Digital Home Thoughts: Microsoft Plans to Release IPod Rival for Christmas

"Microsoft Corp. is planning to have a portable music and video player out by Christmas in a challenge to Apple Computer Inc.'s iPod. The digital player will have a wireless Internet connection, enabling users to download music without being linked to a computer, a feature the iPod doesn't offer, according to people briefed on Redmond, Washington-based Microsoft's plans. Microsoft, the world's largest software maker, is seeking to take share from Apple's iPod, which commands 77 percent of the $4 billion U.S. market for digital music players, based on figures from market researcher NPD Group Inc. Apple's iTunes music store is used for 72 percent of music downloads. Microsoft has spent the past six years relying on partners to make players that use its software. "None of Microsoft's partners are doing the job that needs to be done," said Michael Gartenberg, an analyst with Jupiter Research in New York. "Apple has set it up so Apple music flows only to Apple devices. It locks Microsoft out and gives Apple more of a hold.""

J Allard and Robbie Bach were the two guys who spearheaded Microsoft's previous venture into creating their own hardware to support their content - the Xbox. Now they've been assigned to head their next venture, the 'XPod' (which may or may not be called the XPod). Only time will tell if MS can take a chunk out of Apple's revenue, but after the success of the XBox, I'd say they're on the right track. Personally, I would love to see some real competition to the iPod emerge. Apple's complete domination over the market is bad for consumers and bad for innovation. Competition gets us better devices at better prices.