Microsoft Readying An iPod Challenge? (MSFT, AAPL)

 |  Includes: AAPL, MSFT

An article by Michael Santoli in this weekend's Barron's (sub. req.) speculates that ol' Softie will soon release a digital media player to compete with Apple's iPod. Hints that indicate this, excerpted from the article:

Last week, [Microsoft] announced that it had joined with Viacom's (NYSE:VIA) MTV Networks to launch a digital music service that will be built into Windows Media Player, to compete with Apple's iTunes... Then came news, by way of a Microsoft memo described in the Wall Street Journal Thursday, that Microsoft was consolidating its consumer businesses (music, movies, videogames and TV) under Robbie Bach, a leader in developing Microsoft's successful Xbox video console, to date the company's main foray into hardware...

with the recent release of the Xbox 360, Microsoft has a hardware-design group with time and energy to spare until the next videogame hardware cycle. This isn't necessarily a profound threat to the iPod juggernaut, which has enormous momentum. But the $8 billion digital music and media business -- growing 15% a year -- includes $2.5 billion of non-iPod revenue, much of which Microsoft could sop up with a strong entry in the segment...

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