(2006-07-22) — Apple Computer executives scrambled yesterday to put the best spin on devastating news that arch rival Microsoft will soon launch a competitor to the iPod, tentatively dubbed Windows ME2Pod.

While Apple’s iconic mp3 player currently owns a 77 percent share of the market for such devices, industry experts with contractual obligations to Microsoft warned that the Windows ME2Pod could quickly become the dominant player.

“It’s a category killer,” said one unnamed source who lives in Redmond, Washington, and has seen preliminary sketches of the product on an in-house blog.

In addition to the hardware, Microsoft also plans to launch a challenge to Apple’s wildly successful iTunes music service.

Unlike iTunes, which allows customers to select and download their favorite music, the new Windows VistaTunes application will automatically download songs to the user’s computer based on “a robust algorithm that determines not just what the customer might like, but what he should be listening to,” according to the source.

Each morning, the VistaTunes customer will find new music has appeared on his PC and been sent via Bluetooth to his ME2Pod. At that point, the user simply reboots both machines and enjoys the music.

Microsoft refused to comment on the report, but confirmed that if such a product were under development, it could be released “sometime in late 2007, early 2008 or perhaps June 2010.”

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