Microsoft confirms 'Zune' device to compete with Ipod

Posted by Scott M. Fulton, III

Redmond (WA) - In an exclusive interview with Billboard magazine that appeared only in print today, MSN entertainment marketing vice president Chris Stephenson officially stated Microsoft is indeed working on an MP3 player device to compete with Apple's Ipod. Reuters later confirmed the news through its own channels.

"Today we confirmed a new music and entertainment project called Zune," Stephenson said later in a statement released by request to reporters. "Under the Zune brand, we will deliver a family of hardware and software products, the first of which will be available this year. We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together."

Stephenson's statement, and the Billboard story which preceded it, effectively confirms information released by BetaNews late last night. Reuters states that the description of this device is in keeping with information it learned last month from record company executives who said they were witness to a demonstration of the device from Microsoft.

At that time, Microsoft actually denied to TG Daily that the demonstration in question was anything other than a review of the company's existing Windows Media technology, which it already markets in conjunction with partners such as Toshiba and iRiver. Microsoft had also reiterated its commitment to helping its partners with Windows Media encoding standards for those devices. With today's news, it's unclear how that commitment will continue given that Microsoft will actually be producing a competitive player, unless it has plans to license Zune services to those partners.

In a blog posting a few hours ago by JupiterResearch vice president Michael Gartenberg - who was evidently given a heads-up - he addressed this very issue. "Let's face it, the platform argument is dead and licensees will have to deal with it," Gartenberg wrote. "On [the] one hand, no one has ever successfully created a business where you license technology to licensees and simultaneously compete with them on the device side. On the other hand, it's not like there's a lot of other places for licensees to go to get technology."

Reuters states it learned that Robbie Bach, Microsoft's entertainment and services division president, is working in tandem with Xbox team vice president J. Allard, to produce the device. But it learned this through unofficial sources today, as official sources continue to decline comment, to Reuters as well as to TG Daily.

While the regular press appears to have lost a round of "Stump the Reporters" with Microsoft, bloggers such as Gaming Steve appear to have won the day, having obtained news yesterday, along with what appears to be a reasonable facsimile of a prototype unit and a trial logo. Several months ago, similar pictures of what were stated to be prototype UMPC devices, along with a logo - both of which Microsoft denied early on - turned out to be legitimate.

Some years back, "Zune" was used as the name for a prototype for a resurrected Amiga operating system, though that project was discontinued.