If you were wondering how Microsoft could possibly bring their first digital audio player to market in time for the holiday season the answer is simple: they couldn't. Instead, Microsoft will have Toshiba manufacture a souped-up version of the Gigabeat, and put the Microsoft name on it. Microsoft will take over manufacturing of the device after the holiday season launch.
I got an up-close look at the Gigabeat at the Toshiba In Your Life event earlier this summer, and came away very impressed with the device. This is a good move for Microsoft, if they hope to cut into Apple's huge marketshare with the iPod, they need to get a product on the shelves for the holiday shopping season, and I think they've picked a winner in the Gigabeat. Microsoft plans to further upgrade the device when they take over manufacturing, plans include a competitor to the iPod Nano, a smaller device. — Brian Ward
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Apparantly the screen will be larger, but otherwise they will use Gigabeat guts. I think this is smart, Christmas season is critical, and this is the only way they could ship on time.