Microsoft Rumored To Be Working on a Portable-Media Player

TopTechNews covers the Microsoft rumor last week that the company is working on a portable media device. Nitin Gupta at Yankee Group commented that "unlike previous unsuccessful efforts from Sony and other device manufacturers, Microsoft's efforts might create a viable alternative to the iPod, but the company will have to overcome challenges that Apple was able to conquer with its integrated iTunes software."

Gupta explained Apple has an integrated solution that consists of the device, software, and online service that others have not been able to replicate. Gupta said, "Most people using these devices are not technical experts. They don't want to try to guess what device works with what online service. That's an integration issue -- just making it work. The other issue is marketing."

Mukul Krishna at Frost & Sullivan added, "Microsoft needs some sort of differentiation in terms of the content they offer and device capabilities. There are so many MP3 players out there right now, but, on the street, if you don't have an iPod you're just not happening. Microsoft is quite late getting into the market; they have to include Xbox."

Krishna continued, "Microsoft will have to think very long and hard about this. If they started working on it seriously, it will be at least holiday 2007 before we see a device. It's a big risk, but if they were able to do it, they would get a leg up on Sony, if not Apple."

Krishna thought a PSP like device might work. He said, "The question is whether they can make it hip. It has to be more than just a portable Xbox and has to take it to the next design level, and that will take a lot of dollars."