Microsoft to push ‘iPod killer’ software

18 Mar 2004

By the end of this year Europe will witness the arrival of iPod-like video player devices powered by Microsoft’s Portable Media Centre technology. The devices, regarded as a natural progression from the MP3 music player, will come with colour screens capable of playing videos and games and will represent a direct attack by Microsoft on Apple’s fast-selling music player.

The new Microsoft-powered devices will be manufactured by European firms like Archos and Thomson and Korean manufacturer iRiver International, who already have similar devices on the market.

Another device made by Creative Labs is the Creative Zen Portable Media Centre, currently on the market, which enables portability of up to 80 hours of video, 5,000 songs or 50,000 digital images on a sleek handheld device with an intuitive interface. Microsoft chairman Bill Gates has featured the device in most of his recent keynote addresses such as the US Consumer Electronics Show and the company is pushing the technology at this week’s CEBIT event in Germany.

The Portable Media Centre has an operating system similar to Microsoft desktop Media Centre software and uses Windows media. It can also play MP3 files and synchronises with a Windows XP computer to transfer video, music or photos. A device with a 40GB hard drive would be able to store 175 hours of video, 10,000 songs or 100,000 pictures. Proposed devices would also boast a battery that would last long enough to watch one of the three-hour Lord of the Rings movies or listen to 12 hours of music.

The first devices from Creative Labs will be sold with 20GB or 40GB of storage, with the latter capable of providing 175 hours of video playback or 10,000 songs. The Creative devices will be available in Europe by year’s end and will cost between €570 and €650.

Microsoft is understood to be investing heavily in its Portable Media Centre strategy and is assembling media partners to provide content including movies, music videos and news. The company has signed up music label EMI and music outfit Napster.

However, Microsoft will find that Apple’s hold on the market will prove to be a tough nut to crack, especially in the US where digital music enthusiasts have bought and downloaded more than 50 million songs from the company’s iTunes Music Store since the service began in April last year.

According to figures from Apple, iTunes users are now downloading 2.5 million songs per week, which is equivalent to an annual run rate of 130 million songs per year. Apple sells music at a cost of 99 cents per song but the latest figures do not include a current promotion offer with Pepsi where Apple is giving away one million free songs. Complex music licencing arrangements have meant that Apple hasn’t launched the iTunes service in Europe yet. Apple’s failure to launch in Europe could work to Microsoft’s advantage as the legal complexities could have been wrangled out by the time its devices hit the market.

Microsoft, which has a strong digital rights lobby group in Europe, could also use the introduction of Windows-powered devices to offset the damage likely to be caused by the EU’s looming decision to prevent PC manufacturers including Microsoft’s MediaPlayer software in its Windows bundle.

By John Kennedy