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Microsoft going ahead with iPod rival, but will impact partners

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By LC Angell

Contributing Editor
Published: Tuesday, June 20, 2006
News Categories: iPod

The Wall Street Journal reports that Microsoft is currently in talks with Hollywood studios about licensing movies and TV shows for use with a forthcoming Microsoft portable device. The company has reportedly told at least one studio that it may launch the iPod rival as early as the fourth quarter of this year. Analysts believe, however, that the device will have a bigger impact on Microsoft’s current partners. “We believe the biggest issue with Microsoft entering the portable hardware business is that it puts it in direct competition with its partners,” American Technology Research analyst Shaw Wu said in a research noted provided to iLounge. “While the focus is on Apple, we believe this move will likely have a much larger competitive impact on Creative Technology, Sony, Samsung, MTV Networks, and others.

Wu also says that it is “yet to be seen if Microsoft can be profitable (and not to mention successful)” in producing portable hardware. “We believe concerns that Apple would be in grave danger should Microsoft pursue a vertically integrated model are overblown,” Wu said, “for a couple reasons: 1) we believe Apple’s vertical model is tough to execute with not many companies (if any) succeeding; 2) Apple has a large installed base of about 50 million iPods and 300 million iTunes users; 3) we believe Apple’s competitive advantages are largely defendable including its familiar and easy-to-use user interface, industrial design, brand name, and world-class supply chain; and 4) we believe AAPL is pursuing a longer term broader strategy beyond iPods.”

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Comments

1

wow. talk about a vote of confidence for MS….

Posted by Toxic Boy on June 20, 2006 at 9:21 AM (PDT)

2

This is great news. Competition is what capitalism is all about.

Posted by Joshua on June 20, 2006 at 10:40 AM (PDT)

3

While this is may be slightly different from Apple unable to stop Microsoft from copying Apple’s Window into PC, Microsoft’s product will have to be cheaper and more superior than Apple’s. Apple did it right by having iTunes/iPods available in both formats (MAC & windows.

Posted by lateapexer on June 20, 2006 at 11:16 AM (PDT)

4

Simple winning strategy for M$ is to give their player away with a three year subscription to their version of iTunes.  Apple then has some serious competition.  And M$  has the $$$ in the bank. It can take the hit for marketshare whereas Apple can’t.

Posted by Peter on June 20, 2006 at 12:28 PM (PDT)

5

apple has an ample amount of money, i dont think many people realize just how much they are worth…

Posted by t_sun on June 20, 2006 at 1:28 PM (PDT)

6

@Joshua.
This is actually limiting competition.
While currently there is Apple, Creative, Samsung, SanDisk, Olympus, etc. soon there will only be the Apple iPod and the MS XPod (or whatever).

Posted by Daniel Woods on June 20, 2006 at 1:34 PM (PDT)

7

@Killa
I think what he’s trying to say is that Microsoft couldn’t stop Apple from making their player Windows compatible. I think he’s trying to suggest that Microsoft’s player wouldn’t be compatible with Mac, which gives Apple an upperhand with Mac users (as if they already didn’t).

Posted by Adam on June 20, 2006 at 3:42 PM (PDT)

8

does anybody seriously believe with Micrmush’s track record in getting Vista out they can challenge Apple’s iPod? ye gods has anybody used the terribly user-unfriendly WMP 10 beta?

Posted by aaronn on June 21, 2006 at 3:11 AM (PDT)

9

“ye gods has anybody used the terribly user-unfriendly WMP 10 beta?”

I don’t know that it’s “terribly user-unfriendly”, but I do think if this is what they think is going to unseat iTunes as the overall best manager for most people, they’re not paying attention.

WMP and most other software players have this idea that automation means cataloguing every possible media file networked to your computer and then letting you manually sort out what it is you want to put on your player or listen to. iTunes gets it right in that only what you specify is ever in the library and then they give you nigh infinite ways of filtering and syncing it to a player.

Manual sorting works well for a small subset of the users out there, otherwise, you need a much more flexible and intuitive system, and letting people browse by album art does not equal that. Hardware, and even portable player UI, wise I have no doubt that MS can trounce Apple with one arm tied behind their back, where I am skeptical is their ability to abandon the WMP paradigm for something that actually is a music manager and not just a player. Until then, iTunes = music management whileWMP = porn player wink

IF MS is trying to enter the mp3 player market (which I remain skeptical of in the absence of anything substantiated), they should be bright enough to notice that having better players doesn’t help if you don’t have better management software.

Posted by Code Monkey in Midstate New York on June 22, 2006 at 5:26 AM (PDT)

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