Microsoft poised to launch iPod and iTunes rivals

Apple has the same sort of dominance in the online music and portable music player business that Microsoft has in the desktop software space. However, Microsoft plans to change that by going head to head with Apple in both the iPod and iTunes markets. According to a report from Reuters, sources familiar with Microsoft's plans (which generally means company insiders) have confirmed that the software giant is developing an iPod rival and an online music service to compete with iTunes. One look at the music and video cataloging capabilities of the recently launched Windows Media Player 11 was enough to reveal that a service similar to iTunes is on the way from Microsoft. Last month, a collaboration between cable entertainment group MTV and Microsoft was announced that saw the debut of beta version of a new online music service called Urge. The service integrates with Windows Media Player 11 and offers both subscription and pay per track pricing models. Then, early this month, it was revealed that a Microsoft led consortium of nine companies based in Japan planned to develop an iPod killer. The consortium includes mobile handset manufacturer NTT DoCoMo, Toshiba Cor and Napster Japan, among others. It was believed that an MP3 player to take on iPod would probably come in the form of a mobile phone. Apple itself realises that the iPods of the future will need to have mobile telephony functionality. Microsoft has reportedly already developed its iPod rival and is demonstrating it to future business partners in the music industry. The sources indicate that Microsoft's entry into the music market is being overseen by the man who led the development of the company's Xbox business, Robbie Bach, now president of Microsoft's entertainment and devices division. The entry of Microsoft into hardware markets such as portable music players, the Xbox gaming platform, and more recently the introduction of a webcam range, signals an attempt by the company to capture new markets outside its traditional commodity desktop software base. It is notable that all of this is happening as Microsoft founder Bill Gates hands over the reigns as head of development to Ray Ozzie. At 50, the world's richest man is no longer driving the direction of the company he co-founded with Paul Allen. Whether Microsoft under its new leadership can match the performance of its halcyon years under Gates going forward into a new era of consumer computing remains to be seen. Notably, Microsoft's biggest rival in this space is Apple, a company which is once again ruled by the man who did a lot to popularize consumer computing, Steve Jobs. An Ozzie versus Jobs matchup should be interesting to watch. Some may speculate that Ozzie is punching above his weight and that Microsoft needs a Gates to drive the company's direction, just as Apple needed Jobs to get it back on track.