Microsoft Planning Own Music Player?

Microsoft confirmed on Thursday that it was looking into building its own competitor to Apple's iPod, which controls nearly 75 percent of the MP3 player market. For years, the company took a hands-off approach, allowing its partners to build the players and only offering the software.

That strategy backfired, however, causing a disjointed experience between the hardware and the Windows Media software. Synchronization was unreliable, and some players had problems with Microsoft's PlaysForSure technology. In contrast, issues between the iPod and iTunes are practically non-existent.

Reports that Microsoft was considering its own player first surfaced in BusinessWeek on Thursday. Sources inside the company told the publication a team had been assembled to research the feasibility of building the device.

While Microsoft has dismissed the report as speculation, a spokesperson for the company did confirm that as part of a restructuring program started last year Microsoft was considering its own player. However, an official decision to go ahead has not been made.

BusinessWeek suggested that any Microsoft-branded player would be more than just a music player. In an interview, Xbox head Peter More suggested the company would also need to leverage its successes in video gaming. Calling the brand an "opportunity," Moore suggested such a device might carry the Xbox logo.

Michael Gartenberg, vice president at Jupiter Research, calls such a device a big challenge. "People buy the PSP for games first and everything else second. iPods are for media first," he said. "A lot depends on what Microsoft sees as the target for the device and how important they view pocketability in terms of form factor."

Such a change would mean company figurehead Bill Gates would have to backtrack somewhat on earlier comments. Gates has argued consistently that consumers prefer choice in device to the singularity of the iPod. However, sales have shown that his argument has been mostly wrong thus far.

Both analysts and industry insiders agree that Microsoft's position seems to be doing more harm than good to the company's overall position in the digital music market, and have pushed for Redmond to start producing its own device.

"Microsoft must take control of this situation if they're ever to come close to competing head-to-head with the iPod," technology blogger Chris Pirillo wrote recently. "I believe it's imperative that Microsoft set the quality bar for others who develop for Windows platforms."