Micro$oft takes on Apple

[MikeHunt]

Microsoft takes on Apple

Nicola Clark International Herald Tribune

Thursday, March 18, 2004

New entries in portable media-player field

HANNOVER, Germany Microsoft is expected to announce Thursday a series of partnerships linked to the planned introduction of its new hand-held combination music and video players in Europe, a development that the company hopes will give it an edge against Apple and others in the market for portable media devices.

At the same time, Sony stepped into the potentially lucrative market for hand-held media players, announcing details for a pocket-sized music-only gadget and its new online music service, called Connect.

Microsoft is expected to announce that the British units of EMI Music - home to music stars including Kelis, Jay-Z and the White Stripes - and the online music and video service Napster are set to unveil content-sharing agreements that would support the Microsoft devices by the end of the summer.

Two manufacturers that specialize in consumer-oriented products, Creative Technology and iRiver, would begin to ship versions of its player to retailers in North America and most of Western Europe in the second half of this year, said James Bernard, a product manager at Microsoft. A Samsung version of the device would be available in the United States and parts of Asia, including Japan, South Korea and China, he said.

Bill Gates, the founder and chairman of Microsoft, unveiled the first working prototypes of the machine - originally called Music2go - at a consumer electronics show in Las Vegas in January. EMI and Napster have already agreed to offer content to Microsoft in the United States, as have Walt Disney and CinemaNow.

"This is a very interesting category of device, and it is going to be interesting to see how consumers respond," said Paul Jackson, an analyst at Forrester Research in Amsterdam. "The reason this is so hot right now is because of the iPod's stratospheric rise last year, thanks to Apple's massive marketing campaign."

Microsoft is not the first to bring hand-held video players to market. RCA, a brand of the French electronics maker Thomson, introduced the Lyra AV Jukebox in the United States last year, while Archos offers a rival player.

Analysts said that they expected other consumer electronics companies like Sony and Philips Electronics to develop similar products. "Philips will be a fast follower in this market, rather than a leader," predicted Jackson of Forrester.

For now, Sony, which owns an international library of music and film content, is focusing on digital music products. Sony said Wednesday that the European debut of its Hi-MD Walkman and Connect, an electronic music download service in Europe, both of which will be available in June in Britain, France and Germany.

Gregory Kukolj, the group marketing manager for personal audio devices for Sony Europe, said Sony was introducing five models of the Hi-MD, which will retail in Europe for E250 to E450, or $300 to $550.

Kunitake Ando, the president of Sony, said in an interview that the company's previous music venture, Pressplay, a joint offering with Vivendi Universal, had failed because it was too complex. He credited Apple Computer for creating a portable music player and service - iPod and iTunes, respectively - that "are simple and easy to use."

The entry of Microsoft into the market for pocket-sized multimedia players could well step up pressure on Apple to produce its own video player, some analysts said. "Apple, if they are going to remain on the crest of the wave, needs to come up with something similar," said Paul O'Donovan, a principal analyst at Gartner.

Until now, Apple's founder, Steve Jobs, has been publicly skeptical of the potential market for pocket-sized video players, although he has not ruled out producing one.

"One thing that may be holding back the market is whether there is a perceived need for this type of device, whether consumers come to view it as an MP3-killer, or just an audio player with some nice video add-ons," said Jackson of Forrester. "I think the jury is still out on that."

He conceded, though, that with prices ranging between $400 and $700 - about the same as the high-end audio-only players currently on the market - "you do get quite a bit more interconnectivity for the same amount of money."

Another issue is that of battery life. Microsoft's new device claims to be able to store 175 hours of movies, but the capacity of its battery, while removable and rechargeable, is just three hours - long enough to watch one feature-length film, but probably not a second.

:scratchin:

[DudeAsInCool]

I predict it will be as popular as WebTV