Steve Ballmer has confirmed that Microsoft is working on a competitor to the iPod.
In an interview with Fortune magazine, Ballmer, Gates' right hand man, is quoted as saying:
"In five years are people really going to carry two devices? One device that is their communication device, one device that is music? There's going to be a lot of opportunities to get back in that game. We want to be in that game. Expect to see announcements from us in that area in the next 12 months.
It rather seems like Microsoft is banking on convergence of the handheld and portable market giving it a slice of the iPod market. Microsoft currently has leadership in the portable arena with its Windows Mobile software for PDAs and smartphones.
Of course, Apple could strike back by making its iPod more handheld-esque, functionality that could well be on the way with the possibilities of a large-screen touch-sensitive iPod repeatedly surfacing, as well as the constant possibility of an Apple mobile phone.
Whether or not Microsoft's new device will also emerge as the rumoured portable Xbox we really don't know.
Would you buy a converged device that offered music, Xbox and PDA functionality all in one? We would! Let us know what you think over in the forums.