Microsoft readying Apple iPod rival: sources

NEW YORK (Reuters) – Software giant Microsoft Corp. is
laying the groundwork to compete against Apple Computer Inc.’s
iPod digital entertainment device and iTunes service, sources
familiar with the discussions and plans said on Friday.

Microsoft has held licensing discussions with the music
industry to create its own music service, the sources told
Reuters.

The Redmond, Washington-based developer of software that
runs most of the world’s PCs is also demonstrating an
entertainment device that plays videos and music, the sources
said.

It is unclear when Microsoft plans to launch, they said.

Microsoft’s software technology has provided the copyright
framework for a handful of subscription music services
globally. But these services have failed to topple Apple’s
dominance in music and device sales, despite well financed
backers including Yahoo Inc..

Apple and Microsoft were not immediately reachable for
comment.