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OK, well maybe MS doesn’t expect to crush the iPod immediately, but at least release a true competitor in the portable audio field. Microsoft will start selling a wireless digital music and video player. The device will let users download music and videos over the air, according to one source, a feature which would give it an edge over the iPod, for now (we know how Mr. Jobs likes to add new features with the flick of a switch).

Microsoft has also been showing a new media software application akin to Apple’s iPod/iTunes integrated ecosystem, looking to emulate Apple’s successful iTunes-iPod integration and Sony’s failed attempt to sell MP3 players along with their Connect Music Store.

Robbie Bach, appointed president of Microsoft’s entertainment and devices division in December, is working with J. Allard, vice president of its Xbox team, on the unnamed digital media player/software project, according to a source close to Microsoft. Allard’s involvement is seen as significant because he is one of the few executives at Microsoft with experience in launching a consumer electronic device from scratch with the X-Box gaming system.

Back in 2003 Microsoft came up with its own Portable Media Center software that it then licensed to hardware manufacturers. Creative, Samsung and iRiver all produced multimedia devices using the software, but none of the players have been particularly successful.

This time, however, Microsoft will produce both the hardware and software and sell the device under its own brand. This combined with the fact that the MTV Urge online music store (which is part owned by Microsoft) will play a key part in the company’s new Vista operating system might give the new Microsoft music machine a bit more credibility.

Read [CNN]

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