As Microsoft and its hardware partners prep their Media2Go devices, Apple looms as a potentially threatening competitor, say analysts. The Cupertino, California-based company reportedly has been testing several iterations of a portable video device that would build on the success of iPod. Like Media2Go, Apple's portable video devices, if ever brought to market, would be built around a hard drive. Apple already has success in the portable music player market, where iPod is a leader in retail sales. During the fourth quarter, Apple's dollar market share reached 27 percent compared with about 10 percent for second-ranked Rio, according to NPDTechworld. In terms of unit sales, Apple captured 11.2 percent market share, following closely behind Rio at 11.3 percent and top-ranked RCA at 13 percent. Still, Baker remains sceptical about the portable video player category taking off anytime soon. For one thing, "it usually takes a few iterations to get this kind of thing right," he said. "This was certainly the case with music players." Using the limited demand for computer DVD burners and other video technologies as a gauge, Baker concluded "the demand is quite small" for a portable video player. But Riseland disagreed. In testing, "the technology really resonates with consumers, because they see it as a natural extension of the audio devices they have today," he said. "A lot of people already do video on their PCs, so they can take it with them." Microsoft is already is laying the groundwork for portable video. In January, the software giant started selling Plus Digital Media Edition, an add-on pack to Windows XP. One of the features lets consumers sync content with Pocket PC handhelds and cell phones, including audio and video from Web sites. Microsoft sees Media2Go's larger appeal as helping people reduce the number of portable devices they might carry. "They can now have one device that will tackle both audio and video, and pictures if they like," Riseland said. More important, the company is betting that public transit commuters would be interested in a video device for playing recorded TV shows. For this reason, Microsoft is working on technology for synchronising Media2Go devices with PCs running Windows XP Media Centre Edition. Windows Media Centre PCs, which are capable of recording TV shows to the hard drive, offer a second user interface for accessing the operating system's digital media features. Media2Go devices will use the same interface. "Media2Go would be a great companion to Media Centre, because it would give you portable access to that digital media," Riseland said. "We're hard at work on how to make that a consumer experience." The second version of Windows Media Centre, code-named Harmony, is in the first round of beta testing. Microsoft is expected to release Harmony in the third quarter.
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