Microsoft Mulls Digital Player To Rival iPod

BusinessWeek reported Thursday that the Redmond, Wash., software maker was working on plans to develop its own device, rather than just rely on partners to take on Apple, which is becoming a dominant player in entertainment on the Web. Quoting sources inside the company, the magazine reported that Microsoft had put together a team to consider the business behind such as initiative.

A spokeswoman for the company called the BusinessWeek story "speculation," but confirmed that Microsoft was considering its own music player, along with many other projects stemming from a major reorganization announced last year.

"Officially, nothing has been announced," a spokeswoman said. "I don't think anything has been officially decided."

In September, Microsoft reorganized its operations into three divisions, including an Entertainment and Devices Division that was meant to improve the company's ability to provide software and services for mobile devices.

Chief executive Steve Ballmer said that the reorganization was needed to "enhance decision-making and speed of execution" of products and services. The company at the time was facing sharp criticism for having internal operations that hampered its effectiveness and chased away employees.

Despite having portable media players before Apple, the iPod has trounced rivals in the market, capturing about three-quarters of sales.