Microsoft planning WiFi-enabled portable media player, working on MVNO for next year
Ok, by now it's more or less an open secret that Microsoft is going to shift away from its current model and go straight after the iPod with a portable media player of its own, but we've landed …
Context & Ripple Effects
Both claims here are rumors, not announcements: a WiFi-enabled portable player aimed at the iPod and an MVNO mobile service targeted for next year, neither confirmed by Microsoft. What makes the pairing analytically interesting is that together they sketch a full stack — device plus wireless connectivity — which is the shape a serious run at Apple's iPod franchise would have to take.
As of mid-2006 Microsoft's portable business is built on licensing the PlaysForSure model to third-party hardware makers, so a first-party player would mark a break from that partner-centric approach toward the vertically integrated model Apple already runs.
First-order effects
- If the player ships, Microsoft stops being a platform licensor in portable audio and becomes a direct hardware competitor to its own PlaysForSure device partners, splitting that ecosystem.
- The MVNO rumor puts carriers on notice: Microsoft buying wholesale capacity means owning the customer relationship on connected players rather than renting it from an operator.
Second-order effects
- Apple's moat is integration of player, store, and sync; a Microsoft device-plus-MVNO stack forces the competitive comparison onto that same integrated ground rather than feature checklists.
- Carriers risk being demoted to commodity bit-pipes if consumer-electronics brands routinely bypass them via MVNOs, pressuring operators to lock up exclusive device deals defensively.
Third-order effects
- If the pattern holds, control of the portable-media customer — billing, interface, content — migrates from network operators and OEM assemblers to a handful of vertically integrated software companies, with regulators eventually asked what 'the carrier owns the subscriber' even means.
The trend: Software and consumer-electronics companies are assembling end-to-end portable entertainment stacks — device, store, and increasingly the wireless connection itself — collapsing the old division between gadget maker, content retailer, and carrier.