Microsoft prepares 'iPod killer' for Europe

The first handheld gadgets to play music and movies on Microsoft's "iPod killer" software will be available in Europe in the second half of 2004, the company said Thursday. The gadgets will run on Microsoft's yet-to-be-unveiled Portable Media Center software in a direct assault on iPod, Apple's hot-selling digital music player. Working with a host of manufacturing partners, Microsoft is introducing a device that plays movies and stores digital photos as well as songs in a bid to grab a share of the fast-growing digital media player market.

"We think this is going to be one of the hot devices for Christmas 2004," said James Bernard, product manager for Portable Media Center. The software giant has enlisted Creative Technology and Korea's iRiver International to develop devices for the European market. Microsoft said the Creative devices will be available in Sweden, the United Kingdom and Denmark first, retailing for approximately $700 to $800. The product will be available in Germany, France, Italy and Spain to follow, but also by year-end, Microsoft said.

Price details and retail launch dates were not available for the iRiver device. The Creative players will be sold with 20GB or 40GB of storage capacity, with the latter providing 175 hours of video playback or 10,000 songs, Microsoft said. The devices play MP3 files as well as audio and video content recorded in Microsoft's digital format. The devices run on the Windows CE operating system.

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