NEWS - Saturday, June 17, 2006

Microsoft is Working on iPod Killer

NEW YORK, June 16 (Reuters) - Microsoft Corp. is developing a music and video device to compete with Apple's iPod and creating its own music service to rival Apple's iTunes, sources familiar with the plans said on Friday. Robbie Bach, a rising star at Microsoft who headed development of the Xbox video game business, is overseeing the project, one source said. The company has held licensing discussions with the music industry and is already demonstrating the entertainment device, the sources told Reuters. Microsoft declined to comment. The news comes a day after Microsoft founder Bill Gates announced he would ease out of a day-to-day role at the company he built into the world's biggest software maker. Bach was promoted to president of Microsoft's entertainment and devices division after it was restructured in December. At that time, he wrote in an e-mail to co-workers, "While I will continue to play an important role in the games area, I will spend more time thinking about our broader challenges and opportunities across the division." A Microsoft-branded music service would reflect a digression from an existing strategy to provide software for other such services, just months after the company announced a service called URGE with Viacom Inc.'s (VIA.N: Quote, Profile, Research) MTV Networks. Continued Here.


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