First, regrettably, I need to publish a correction to my story from last week. Online sources are reporting this week that Apple is NOT selling its new $899 education iMac to individual students and educators. Instead, the discount iMacs are only being sold to “educational institutions”. Details as to Apple’s decision to withdraw the offer from individual buyers are sketchy right now. At any rate, if you were considering making a trip to New Hampshire to snag a new e-iMac, or were ready to order online, you’ll need to wait a bit.

Now on to this week’s business at hand. Reports are surfacing on the internet of the next personal digital music player hoping to earn the title of “iPod killer”. The list of previous pretenders to the throne is, well, long and (mostly) extinguished. This time the challenger comes, reportedly, from Microsoft.

Microsoft has been actively pursuing the iPod for a long time, but only from the software side. Their strategy thus far has been to allow other manufacturers, like Creative, to produce the players. Microsoft licenses their own proprietary Digital Rights Management (DRM) scheme, as well as the Windows Media Audio (WMA) format and the “Play For Sure” logo to the player manufacturers. They also recently partnered with MTV to create the Urge online music store. However, with Apple’s iPod, iTunes digital jukebox software, and the iTunes Music Store still garnering around a 75% market share, Microsoft has apparently decided to take matters into their own hands.

Their player, according to reports, will be called “Zune” (another catchy Microsoft moniker). A purported photo of the new player shows it to be about the size of the current 30 or 60 GB iPod. The screen is larger than the current iPod’s, with the rest of the front of the device occupied by a click wheel and Forward and Back buttons (eerily similar to the 2nd generation iPod, which is, if I’m not mistaken, three generations ago - but, I digress).

There are no details on the “guts” of the device, other than reports that it will be able to play music and videos, display photos, and perhaps play games derived from Microsoft’s XBox 360 game console. Sources indicate that Zune (doesn’t that name just trip off the tongue?) will have wireless capabilities, allowing it to receive media without plugging in. Some believe Zune users will be able to purchase and download music directly from wireless kiosks.

There are also reports that Microsoft will make it easy for iTunes/iPod users to migrate to Zune. They plan to cut deals with the record companies to provide free WMA-format, DRM-protected “replacements” for music that people have previously purchased from Apple’s iTunes Music Store. Although this would cost billions, well, Microsoft has the cash.

Microsoft is also reportedly in talks with the many companies that currently make a ton of money providing accessories for the iPod. Microsoft will license the Zune’s proprietary connector and adapters to the accessory makers, of course undercutting Apple’s licensing fees. Again, they have the cash.

It remains to be seen how Creative and other makers of WMA-compatible music players will react to Microsoft’s entry into the hardware side of the conflict. Also, it should be obvious that Apple will not stand still and fiddle while the iPod dynasty is being assaulted. New iPods are certain to hit the shelves before the holiday buying season, which is also when Zune is scheduled to arrive.

Again, these are all reports from “sources close to Microsoft”. Microsoft has neither confirmed nor denied the reports. Secrecy works for Apple, so why not copy that as well?

© 2006 Peter F. Zimowski