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Microsoft Confirms MP3 Player & New Service

According to the NYTimes, the Microsoft Corporation confirmed that it was developing a portable music player to compete with the iPod from Apple Computer for a share of the $4 billion market for portable entertainment devices.

The first products are to go on sale this year and are being developed under the code name Zune, the general manager, Chris Stephenson, said yesterday in an e-mailed statement. Part of the project is a service that will compete with Apple�s iTunes.

Microsoft is abandoning a strategy of relying on partners to produce devices with its Windows software to compete with iPod. They so far have failed to dent Apple�s 77 percent share of the market in the United States for digital music players, according to the market researcher NPD Group Inc. Even with its own product, Microsoft has an uphill climb.

�It will take an awful lot for Microsoft to dislodge an entrenched competitor like Apple,� an analyst with Jupiter Research, Michael Gartenberg, said. �Given Apple�s history with iPod, it�s not like they�re going to sit back while Microsoft enters the market.�

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