Could be if what Businessweek says is true. The Digital Music market has not been kind to Microsoft, Apple has taken the lead and is maintaining it over all its competitors. Then again, Microsoft was never really in this game and no other company knows how to trounce competition the way Microsoft does.

Apparently Microsoft has decided to beat Apple in this market as well. Its an old story with Microsoft, let other take the lead in developing and sounding out new avenues, if they turn out to be profitable then enter the markets with all their monetary strength and buy, cajole or simply use impressive technology (even if it means a temporary loss) to take the lead. Then simply raise the prices to make good the losses while making record profits. Sources of Businessweek reveal that Microsoft has already put together a team to study the potential of such a possibility.

Its not just the profits from the device that is making Microsoft risk its partnership with several companies that use its software in their devices. The truth is that with more Apple iPods being sold, more songs and videos are bought from iTunes. This also means that users go on to buy several accessories and parts for their devices. This means Apple gets to partnership with several entertainment companies, something Microsoft thinks could be a cause for concern in the future.

Xbox boss Peter Moore says any Microsoft media device would have to leverage the company's most significant consumer strength, video gaming. "It can't just be our version of the iPod," says Moore, who nonetheless would not confirm that Microsoft is considering making such a device. So in addition to playing music and videos, a Microsoft device would include games. Microsoft would probably use the Xbox brand to market the gadget. "I think the brand is an opportunity," Moore says.

While the idea might just work, it would also mean that consumers think of the device as more of a gaming console then one for music. This may not be what Microsoft wants since its the digital music market that its really interested in. It could all just be rumors, but Microsoft does have a tendency of entering diversified markets and stopping at nothing to gain market share.

Source: Businessweek