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Handheld Xbox: third time lucky for MS iPod killer scheme?

Lest we forget PMC - oh, I see you have...

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Comment World+Dog is this week feverishly reporting on rumours that Microsoft is hard at work on an iPod killer. Or it may be a PlayStation Portable killer. Or perhaps a PMC killer. No, wait a moment, PMC - aka Portable Media Center - was Microsoft's last attempt at an iPod killer, and just look at what that did to restrict Apple's revenue growth...

Yes, we've been here before, many times. Most recently, Microsoft's Origami Project - aka Intel's ultra-mobile PC (UMPC) - was this month touted as the Beast of Redmond's opportunity to stitch one over the Creature of Cupertino, but it turned out to be little more than a scaled-down Tablet PC with a few consumer-friendly features, including games. There was nothing really compelling.

And don't forget it was Steve Jobs who ignited speculation by suggesting Microsoft needs to create its own iPod rather than simply come up with a technology platform that competing music and movie services, plus some hardware vendors, can rally around.

microsoft's xbox handheld (artist's impression - with apologies to Gizmondo)
Microsoft's Xbox handheld, an artist's impression (with apologies to Gizmondo)

Should we care this time? The information comes from sources cited by San Jose Mercury News columnist Dean Takahashi - the details were garnered while he was researching the book he uses his latest piece to plug. Since Dean's been around the block quite a while, and he's undoubtedly spoken to some senior Microsofties for his book on the launch of the Xbox 360, he probably had access to some decent information.

But what does he reveal? That the project is being overseen by the head of Microsoft's Xbox operation? Well, surprise, surprise. That the handheld is being designed by the guy who sketched the Xbox 360. Again, it would odd if this weren't the case.

To that we can add Takahashi's claim that Transmeta has 30 engineers working on a Microsoft-related project, which makes sense if the unit's to combine the low power consumption required by a handheld and compatibility with the Xbox 360's PowerPC CPU. Transmeta's chips have their own architecture, but the company's software-based x86 emulation layer has proved itself capable of keeping up with real x86 chips. With no low-power G5-compatible CPU from IBM on the horizon, Transmeta will just have to emulate one.

Dean reckons Microsoft's handheld will surface in 2007 or even 2008 and it will have the strength of the Xbox brand behind it and probably a content sales service, codenamed 'Alexandria' (after the famous library, we guess).

By then, Apple and probably Sony too will have stepped up their own content services, adding movies and - in Sony's case - games downloads too. The PSP will have GPS navigation services and probably other mobile-friendly apps too - we'd put money on VoIP software, to run over the device's Wi-Fi radio.

In fact, there's not a lot Microsoft can add to its box that the PSP won't already do by then. Yes, it might have a slightly bigger display and more advanced wireless networking, and it could even have mobile telephony on board. But its form-factor means few users are unlikely to bin their cellphones. Better graphics? Almost certainly, but when you're playing on a handheld that's unlikely to matter as much as it does when you're playing in front of a TV.

If Microsoft tries to roll in too many other, more general-purpose features - handwriting recognition, document viewing and editing, push email - its product runs the risk of losing its focus, which - as Apple has demonstrated with the iPod line, is key. The last thing it wants to offer is a PDA that can play games and a variety of media. The world's had more than enough Palms now, thank you.

That's not to say the Microsoft device will be a failure. Xbox wasn't, and it too entered a crowded market. But neither has it become the market leader, something even Sony's PS3 delay doesn't look like dealing Microsoft. ®

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