Microsoft goes after Apple iPod revenue with rival player

Microsoft is remaining coy about its plans to enter the market currently dominated by the Apple iPod.

Analysts are united in their view that the new Microsoft project, dubbed Zune, will be successful, but only time will tell just how much of Apple's market share the software giant will be able to eat in to.

This week, after much speculation, the software giant finally confirmed it does plan to create a device as part of the Zune project, an umbrella programme of software and hardware focused on digital entertainment.

But the company is keeping tight-lipped about the specific details. "Zune is a project that will take an integrated approach to the entire experience around music and entertainment," said a Microsoft spokesperson.

"Under the Zune brand, Microsoft will build a community for connecting with others to discover new music and entertainment and will deliver a family of hardware and software products-with the first products shipping in 2006."

Michael Gartenberg, vice president and research director, JupiterResearch, says that this new market entry is a clear sign that Microsoft remains displeased with Apple's market dominance. While Microsoft clearly has the technical capability to create a strong rival, it has some ground to gain in creating a lifestyle device, according to Gartenberg.

He said: "When Microsoft decides to enter a market, you can't ignore the impact they will make. It's likely that by force of will and spending lots of money on marketing with a high cost of acquisition on new users, they can capture some market share."

Rob Enderle, principal analyst at the Enderle Group, believes that a number of factors dictate ultimate market success. While he admits that Microsoft has its strengths, he doesn't believe the software vendor has what it takes marketing-wise at present.

"Microsoft could build a product that would be an iPod Killer, but right now they aren't demonstrating the marketing competence that would be required to allow the device to rise to its full potential," he said.

"However, HP didn't have good marketing until they changed out some critical staff, and IBM went through the same process in the early 90s and turned around nearly overnight, which suggests a path for Microsoft to follow that could make them successful. We don't have any evidence yet, though, that they are following it," said Enderle in an article on his website.

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