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Forget the up and coming Blu-Ray vs HD DVD battle or even the PS3 vs Xbox 360 fight the big money this year will be when Microsoft release there own MP3 player…..

After years of allowing other manufacturers to make MP3 players that used its software,Microsoft is developing its own handheld music and video player to take on the iPod, according to a report in The New York Times. And it will have at least one thing the iPod doesn’t: WiFi capabilities that would let users download music without connecting to a computer.

The unnamed device is expected to be in stores by the holidays, and would also have a more advanced video screen than the iPod. Microsoft is in the midst of negotiations with major record companies to sell music and video content online through an iTunes-like download store.

Though Microsoft has licensed its software to companies including Samsung, Sony and Creative Technology for use in portable MP3 devices, the new player would be its most serious challenge yet to the iPod, which has more than 75 percent of the digital player market, to go along with the 72 percent of the digital download market held by iTunes.

Experts said the decision to develop its own device is a sign that after six years Microsoft is no longer content to let other companies try to cut into Apple’s seemingly insurmountable lead. "If this is true, then this is them trying to take more control over the situation.

A Microsoft spokesman declined to comment to the Times on the report, but a senior executive at a major TV network said that even though Microsoft had not yet received commitments from the networks to supply programming to the online store, they were open to working with a rival to Apple’s iTunes, which has been criticized by the music industry for refusing to offer multi-tiered pricing in favor of 99-cent per-song prices across the board.

interesting times ahead…….

Chris Leckness (3531 Posts) - Website | Twitter | Facebook

Chris Leckness is the Owner/Administrator of Mobilitysite. He is a Microsoft MVP, Mobile Devices and a member of the exclusive focus group, Mobius. Chris runs a Mobilitysite, GotZune, and a few other smaller sites and blogs. His personal blog is chris.leckness.com.