Microsoft: Beating iPod Will Take Years

In its financial analysts meeting Thursday, Microsoft acknowledged that competing with Apple's ubiquitous iPod and iTunes combination will be no easy task, but said it was prepared for the long road ahead. The Redmond company plans to spend "hundreds of millions of dollars" on its new music efforts.

Microsoft will release one player under the "Zune" brand name this year, with another to follow in 2007. "This is not a six-month investment time horizon," said Robbie Bach, president of Microsoft's entertainment division. "This is something that is going to be a three-, four-, five-year investment." Unlike past efforts, the company plans to control the entire ecosystem, from the music software to the hardware device.