The company's Zune project is an effort to make inroads against Apple. The first Zune device will be released in the U.S. this fall with products designed to complement Microsoft's Media Center PC software, Xbox 360, Xbox Live, MSN and Windows Live initiatives.


Microsoft Corp. outlined on Thursday its strategy for taking on Apple's iPod and iTunes juggernauts with its own digital-media devices and service -- saying that the "Zune" project will be long and expensive but ultimately worthwhile.


"It is something that is going to take time," acknowledged Robbie Bach, president of Microsoft's Entertainment & Devices Division, in his first public comments since the company confirmed the project's existence last week.


Bach predicted development and marketing costs of hundreds of millions of dollars, and said it's not as if the company will be able to conquer the market in six months. "This is something that's going to be a three-, four-, five-year investment," he said.


Microsoft spent the rest of the day trying to convince Wall Street analysts that it has some other interesting stuff up its sleeve in the meantime.


The occasion was the company's annual financial analyst meeting, a daylong gathering in Redmond where Microsoft describes the state of its businesses and their prospects. The company showed upcoming software, including Windows Vista and Office 2007, and detailed plans in emerging areas such as video games, online advertising, mobile devices and business software.

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Microsoft is indeed developing a digital-media player to compete with Apple's iPod, and there's much more to the story.


A few details trickled out last week from music companies that Microsoft is lining up to support the device. Microsoft isn't commenting, but I was able to piece together a broader picture with some research, reporting and information from a source close to the project. What's being developed is actually a complete line of Xbox-branded digital-media products, including a device that plays media, a software media player and an online media service.


The project, or at least part of it, is referred to internally at Microsoft by the code name Argo — a reference to the huge warship used by the hero Jason in Greek mythology.


Argo is being developed within the Xbox group under the leadership of Xbox co-founder J Allard. His team includes people who previously worked on MSN Music, an online music service that had a promising debut in 2004 but fell victim to Microsoft's dithering over its music strategy.

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Now that Bill Gates' situation is sorted out, tech journalists can get back to obsessing over whether Microsoft is developing its own version of the iPod.


The latest rumors of the mythical mPod appeared recently in a Reuters report, with unnamed sources saying Microsoft is showing the device to music companies. I'd argue that Microsoft has already developed an iPod challenger, and it's been on sale for a couple of weeks at Best Buy and Amazon.com for about $200.


If you squint, you'll even see the Windows logo on the box.

The device is called the Clix. It's a matchbox-sized digital-music player that looks like the top half of a standard iPod. And just like an iPod, it has a bright color screen that displays album covers when music is playing. It also displays photos, records speech, receives FM radio and plays videos and simple video games.


On the inside, Clix has 2 gigabytes of storage and up to 25 hours of battery life ? about 80 percent more than the iPod nano.


Technically, Clix is made by iRiver, a South Korean electronics company with U.S. headquarters in Vancouver, Wash.

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by Gundeep Hora in Cool Tech Zone


You know, it’s entertaining to read about the next iPod Killer simply because you learn to appreciate the truly innovative products time and again. It’s not that all companies and products are useless. No, not one bit. It’s just that their idea of innovation around the ever popular iPod is silly.


Few days ago, Microsoft releasing its own variation of the iPod Killer grabbed headlines....again. How long have we been hearing about this? This time around, the news was passionate and more assuring than previous times. Then again, Microsoft’s unclear launch plans were disheartening, but totally expected. As much as Microsoft wishes, there’s no way it can crush the iconic iPod.

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