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Last Updated: Friday, 7 July 2006, 13:13 GMT 14:13 UK
'iPod rival' speculation dampened
Microsoft licenses its technology to third-party firms
Microsoft has said reports that the company is planning an MP3 player to rival the iPod are based on "speculation and rumours".

The software giant and games console firm said it did not "have anything to announce at this time".

Unnamed music industry executives have told the New York Times that they have received briefings about the product.

The iPod rival would have wireless internet capabilities to download music without a PC, said the report.

Apple's iPod is the dominant MP3 player in the market and its iTunes music store is the most successful download service.

The iPod remains the world's favourite mp3 player

Microsoft currently licenses its Windows Media Player technology to manufacturers, including Samsung and Creative, to use on players they produce.

Earlier this year reports that Microsoft was developing a rival to iPod proved inaccurate. The firm was developing a new handheld computer platform technology which was then licensed to third-party companies to build.

Nate Elliott, digital home analyst at Jupiter Research, said that if Microsoft were planning an MP3 player it would be because of "frustration".

"Microsoft and its partners have made no significant headway into Apple's dominance of the market."

If Microsoft wants its software to be the dominant music platform it will need to get a product out there quickly
Nate Elliott, Jupiter Research

He added: "Microsoft is not a hardware company but they have shown that when they really want to make a success of something they are willing to do it themselves.

"The obvious example is the Xbox."

Mr Elliott said Microsoft would have a challenge breaking Apple's hold on the market.

"Apple has a fantastic product. Other mp3 manufacturers have added features to their products but the vast majority of consumers have voted with their wallet and bought iPods.

"The extra features do not seem to matter to them."

Mr Elliott said Microsoft was entering the market before it was too late.

"We are reaching critical mass in Europe with 18% of homes owning an mp3 player.

"If Microsoft wants its software to be the dominant music platform it will need to get a product out there quickly."

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