"Is Microsoft going to develop a handheld, you know, MP3 player, to combat iPod?" asked Schyler Mishra, 19, a senior at Seattle's John Marshall High School asked Bill Gates, who was appearing at the company's annual Minority Student Day.
Gates answer was as indirect as possible:
"We are talking with partners about how we, working with those partners, can make even better music players. We've got some in the market today.
I'd say in total they have about 20 percent market share, which is lower than we like, and so we're seeing where we can come together to make a device that's less expensive and connects in better ways, does photos and videos in better ways.
I don't think what's out in the market today is the final answer. But again, it just shows the magic of software. Apple did a very good job on iTunes, did the user-interface design right. That means we'll have to match all that good work and do something even better.
Between us and our partners, you can expect to see some pretty hot products coming out over the next couple of years."
Of course, this does nothing to shed light on whether Microsoft are planning their own player, so that they may control the entire user experience like Apple does with the iPod. The fact that they have considered this is known, and as Paul Thurrott pointed out, it would have to be 'perfect' if it is to have any chance. There is more at stake here than the digital music player, for if Microsoft does come out with their own player, and it fails, they risk causing serious damage to their WMA format.
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