iPod, iTunes rivals on Microsoft's roadmap?

Microsoft's DRM-encrypted Windows Media Audio format is already the standard for legal music outside the iTunes Music Store, but according to a report from Reuters, Microsoft is planning to go one step further. "Sources familiar with the company's plans" claim Microsoft will introduce an online music service of its own to compete head-on against Apple's music store. Microsoft won't stop there, either; a music player to compete against the iPod is also said to be in the pipeline. Reuters' sources say Microsoft has already engaged in licensing talks with the music industry, and that an "entertainment device that plays videos and music" has been demonstrated.

There's no word on a launch schedule or pricing, but the fact that Reuters is reporting on this lends the rumor a good deal of credence. Microsoft may have a tough job wrestling market share away from Apple, though; last year, the iTunes Music Store made up a whopping 82% of all legal music downloads in the United States.

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