Fashionably Late?

If respectable business news service Bloomberg is to be believed, J Allard has been locked in a room somewhere in Redmond for the last year or so working away on Microsoft's fashionably late entry to the iPod party - and we'll be seeing the fruits of his labours at the end of this year. Actually, you don't just have to believe Bloomberg on this; the idea that Allard is working on a handheld media device, if true, is the industry's worst kept secret, as anyone who has read Dean Takahashi's excellent recent book on the Xbox 360 project, The Xbox 360 Uncloaked, can tell you.

Conventional wisdom says that Allard most recently worked as the public face of the videogames division at Microsoft - a role for which he got an extreme corporate makeover and a much-vaunted passion for extreme sports and skateboarding in the corridors at work, which we'd call a mid-life crisis in full effect if we didn't think that shooting fish in barrels makes for poor sport - so therefore, it stands to reason that this device will have gaming functions. Conventional wisdom may well be right; after all, Microsoft's Live Anywhere model, which the firm revealed at E3, would expand very nicely indeed to fit a connected handheld console into the family.

However, Bloomberg - and much of the rest of the world - is far more interested in the idea of Microsoft's system as an iPod killer than it is in the idea of a PSP killer, not least because the much-vaunted giant-slaying capabilities of the PSP have so far left Nintendo and Apple without so much as a scratch to show for the battle.

In this instance, you can see why Microsoft might want to join the fray. Apple's dominance of the portable music market isn't doing its rival's health much good, after all; even though the majority of iPods are plugged into Windows machines, those machines are running iTunes, Apple's own music player, they are buying music from the iTunes Music Store, and they've even got the audacity to be storing music in the AAC format which, in its encrypted form, doesn't play nicely with Microsoft's own Windows Media family of software.

This breaks the Microsoft model. It means you can't stream music off a Windows Media Centre PC, because it's not stored in Windows Media Player. It means your music is inaccessible to your Xbox 360 (okay, admittedly, that's not insurmountable - if you use a Mac, you can find a fantastic third party application called Connect360 which shares your iTunes library of music with your Xbox 360, but then again, Microsoft would probably prefer if you didn't use a Mac either), to your UMPC tablet device, and so on. Worse again, Apple is making a huge head-start on doing exactly the same thing with video content - arguably the entire raison d'etre of the Windows Media push.

So the firm's new projects storm trooper J Allard is dispatched to create a device that will rival the iPod, and give buyers an alternative this Christmas. He may well succeed; Microsoft has learned many lessons about hardware design since the obnoxious shape and size of the original Xbox amused the industry so much nearly six years ago, after all, and it's easy to believe that the firm could produce a sleek, pocket-sized, attractive music and movie player, perhaps even one that plays a decent game of Geometry Wars.

However, that's not good enough. What Microsoft needs is not just a sleek player and a good marketing campaign; if defeating the iPod was that simple, companies like Sony would have done it by now. Apple's advantage in the media device market isn't just sleek design and good marketing - it's all about the software. The iPod is stunningly easy to use, even for a rank amateur in the technology field, and that isn't just in terms of the interface on the device. Plug it into a PC or Mac, and iTunes integrates seamlessly with the player; go to the iTunes Music Store, or rip a CD, and the experience is equally smooth and simple. People buy iPods because they like the design and the marketing - but they then proceed to buy their next iPod, and recommend them to friends and family, because they love the user experience.

Perhaps ironically for a company which regularly reiterates that it is a software company, not a hardware firm, it's here that Microsoft will face its biggest challenge - just as Sony has. The firm needs to launch not just a great player, but also a fantastic update to its PC software and a comprehensive, user-friendly store for music and videos - and, indeed, games. That's far more challenging than just putting a nice piece of consumer hardware into the market; a suite of software, an entire business model and a host of difficult partnerships need to be put into place, not just a few manufacturing facilities and some catchy advertisements.

At present, the signs are not necessarily pointing towards success in this direction - and one of the most worrying ones is to be found on the Xbox 360, where Xbox Live Marketplace is simultaneously both an example of how successful Microsoft can be in downloadable content and media - and how badly the company can implement it. Marketplace, even with recent updates, remains difficult and unpleasant to navigate and glean information from, and that's even for the Xbox 360's current early adopter market. Services like these need to be easy to use for a wide range of people - old people, non-gamers, casual users - not just for the hardcore, and if the hardcore market is already being turned off by your insistence on having endless pages of text listings for content that isn't relevant to them to scroll through, then you need to seriously rethink everything you think you know about interfaces.

That being said, Live Marketplace has unquestionably been a success, so far; and the firm's participation in the consumer hardware space via the Xbox products will put it in a position of strength to launch a new product that it would not have occupied only a few years ago. However, question marks still stand over any Microsoft portable media device, and not just over its success. The games industry also needs to question what place and purpose such a device would fulfil, and what relevance to this business it may have. If the device is really launching this year, then games are clearly low on the agenda, or it would have been revealed at E3; if it is not, then it will launch into a marketplace not only utterly dominated by iPod, but also heavily saturated with PSPs, Nintendo DS', and game-capable smartphones. Allard's handheld may not be fashionably late in the end; in fact, this party might already be over.