More on Microsoft's "iPod killer"
Microsoft's 'iPod killer' threatens to crumble AppleThe rumours are rife and the plan is cunning, writes Chris Ayres
The Austrailian, 17jul06
AS soon as they had the call from Microsoft's headquarters in Washington state, the record company executives knew something huge was about to happen.Microsoft's developers and marketers wanted to show the Los Angeles music moguls something new, and they wanted to do it in person.
Appointments were made, flights were booked. Within hours, rumours were zinging through cyberspace -- the music industry not exactly having a reputation for discretion. Before long, Microsoft's top-secret new gizmo had an unofficial nickname: "the iPod killer".
Since the meetings, no music executive has dared break their non-disclosure agreement to talk publicly about what they were shown.
Microsoft is not strictly a manufacturer -- when it decides to make gadgets, it does so on an epic scale, as Sony found out to its cost when the PlayStation games console came up against the Xbox.
Further rumours surfaced last week about the iPod-killer, the most interesting, perhaps, being its internal code name: Argo, in honour of the warship of Greek mythological hero Jason, or so claimed The Seattle Times.
The report also said the device was being developed by the same team that brought the Xbox to market and might be part of an entire line-up of digital media players sold under the Xbox brand.
Many in the industry think Microsoft chief executive Steve Ballmer -- known for shouting so loud at meetings he injured his vocal chords -- has smelled blood at Apple, which is reportedly having problems getting its new line-up of iPods ready for Christmas. Apple has not commented.
Ballmer's cunning plan? To skip ahead to the next generation of devices by offering a rival player that can download songs from "hot spots", such as the wireless networks in Starbucks coffee shops.
Ballmer has an added incentive to succeed: he wants to prove himself, now that Bill Gates has signalled his retirement to devote his life to philanthropy.
Taking down the iPod, and Apple's co-founder Steve Jobs with it, would show that Ballmer was Gates's equal.
Those who have seen the Microsoft device say its cleverest trick is the ability to hook up to wi-fi networks and share songs with other nearby Microsoft players. If you sat next to someone in Starbucks, for example, you could listen to their record collection free.
Alas, because of fears over music piracy and lawsuits from record companies, there will almost certainly be no facility to keep the music when the other player moves out of range.
Microsoft is already in a position to offer music to users over the internet, having forged a partnership with MTV, the music television broadcaster, to launch Urge, an online music store.
It is thought Microsoft is also looking at ways to allow users of Apple's iTunes to transfer their music to a Microsoft equivalent for free.
So far, neither Apple nor Microsoft have said anything publicly about the iPod-killer. But Apple investors are already spooked and shares in the company are at a nine-month low after a series of negative analysts' reports on Wall Street.
Credit Suisse First Boston last week warned the company might forecast revenues as low as $US4.6 billion ($6.11 billion) for the last quarter of the year, compared with hopes of $US4.9 billion. Why? Because it is allegedly cutting back on shipments of its current generation of iPods to make way for the new ones in time for Christmas.
On top of that, many Apple fans had been hoping for the ultimate iPod before Christmas: a widescreen version featuring a display that would take up virtually the entire device, and touch-screen controls instead of the iconic iPod scroll-wheel.
There was even talk of wireless Bluetooth headphones. But no one is sure that Apple can pull this off in the immediate future.
Phil Leigh, founder of the internet research company Inside Digital Media, believes Microsoft has no choice but to act: "They have simply got to offer an alternative to the iPod. It's similar to what happened with video games and the Xbox."
But slicing the Apple will not be easy. Apple controls about 80 per cent of the market for music players and about 75 per cent of the market for legally downloading songs. And songs downloaded to an iPod cannot be transferred to a rival device, and vice versa. The formats are as incompatible as VHS and Betamax and, just like the video wars of the 1980s, there will only be one winner.
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Here7/17/2006 10:07:00 AM
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