Official: Microsoft's iPod/iTunes competition
For years now, Microsoft has largely left Apple, the iPod and iTunes alone. Sure, it tried to sell "free market" and call Apple a "closed market" and offered Apple's competitors online stores, but it hasn't directly competed with Apple. People often said: "This will be the iPod or iTunes killer!" - but Apple prevailed. But now that Microsoft has officially announced
they'll release "Zune", a competitor to both iPod and iTunes, things might look a little different. If all goes well for Apple, it won't matter much. Apple is prepared to offer the 6G iPod around the same time (late 2006/early 2007), which will be "the" iPod video, which will have the full front as both screen and input device - as well as full movies through iTMS (which'll mean iTunes Media Store by then). Sources say that Apple won't do rentals, though, as has been widely rumoured. Instead, Apple is continuosly persuading the biggies to offer good pricing for full movies, so iTMS can sell them with similar conditions as songs, i.e. you can keep the movies, copy them to all your iPods (although I guess you won't own many that can play video), burn them to (lower quality) DVDs and share them among some of your Macs.
The important thing here would be to "simply" tell the market that the iPod is the market leader because of features, content and price. And Microsoft can try and claim to be as "open" as they want: It won't matter much if the music (and obviously the movies) actually plays on Apple's side.