“Apple Computer Inc. could soon find itself facing more competition for its iPod digital music player from its old rival Microsoft Corp., as the software giant is reportedly ready to launch its own portable media player in time for the key holiday shopping season,” Rex Crum reports for MarketWatch. “According to published reports, Microsoft is preparing to roll out a competitor to the market-leading iPod which will be capable of downloading songs wirelessly, something that current iPod models can’t do.”

“Gene Munster, an analyst with Piper Jaffray, said that while Microsoft isn’t saying anything directly about entering the fray against the iPod, the company’s history of leaking information in advance of product releases suggests a device is in the works,” Crum reports.

“Still, it’s far from certain that a Microsoft-branded device will be able to supplant the iPod, which holds about 75% of the U.S. market for digital media players, according to the research firm NPD Group. Apple’s iTunes Internet music store accounts for more than 70% of all legally downloaded songs,” Crum reports. “‘The question will be, ‘Does anybody want it?’ Munster said. ‘If it’s just the same old MP3 player, there are already lots of those out there. It doesn’t mean Microsoft won’t be successful, but they will have to do something more,’ by adding new features, he said.”

Crum reports, “The latest reports come amid the usual summer speculation about what Apple has up its sleeve for the back-to-school and holiday seasons. Apple hasn’t released a new iPod since bringing a 1-gigabyte version of the iPod Nano to market earlier this year, and analysts and investors have begun to wonder what the company will do next… Analysts are looking for Apple to do a redesign of the iPod that could include everything from an iPod cellphone to a new video iPod with a larger screen.”

“Such a move could see Microsoft competing against its own partners instead of Apple, according to Shaw Wu, an analyst with American Technology Research,” Crum reports. “No matter what Microsoft says, this move essentially puts Microsoft in direct competition with its partners that it has worked with over the past three-to-four years,” Wu wrote in a recent research note. Wu said Microsoft’s entry into the digital-media player market would likely have a larger competitive effect on its partners such as Sony Corp., Samsung and Creative Technology Ltd.”

“Wu said that Microsoft could do something similar to what Apple has done with the iPod and iTunes Music Store, but that the company has struggled to make money with similar business extensions, including the Xbox. Wu questioned whether Microsoft ‘is willing to fund another potential highly unprofitable business,’” Crum reports.

Full article here.

MacDailyNews Take: Sounds like Microsoft hopes to “liberate” your tunes from Apple FairPlay’s “house arrest” to their monopolist-friendly, Windows-only “maximum security prison.”

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