Microsoft Wants to Beat Apple to the Sonic Punch

Music is all about timing, so it's probably not a surprise to see Microsoft (NASDAQ: MSFT  ) fortify its Xbox Music platform just ahead of Apple's (NASDAQ: AAPL  ) big media event tomorrow.

Microsoft announced last night that Xbox Music is branching out from Windows-fueled gadgetry. The software giant will be making its streaming music service available to Android and Apple's iOS devices along with free streaming on the web.

It's been nearly a year since Xbox Music was introduced. Contrary to its name, it doesn't have to be tethered to Microsoft's popular video game system. It was made for owners of Windows PCs, tablets, and smartphones to enjoy millions of streaming tracks for free. Folks wanting a bit more flexibility can pay up for the Xbox Music Pass for enhanced features including offline listening.

Shares of Pandora (NYSE: P  ) initially dipped when Xbox Music was announced, but that didn't last. Microsoft's shortcoming at a time when streaming is consumed primarily on mobile devices is that it commands just 4% of the smartphone and tablet market. Android and iOS are the mobile operating systems of choice, and now that will no longer be an obstacle as Microsoft embraces the competition.

This will naturally be played up as Microsoft's shot at Pandora, but it's bigger than that.

After all, Microsoft is a company that isn't afraid to cut a big check to make up for lost time. If it shelled out $7.2 billion for a meandering handset business division last week, wouldn't it be a no-brainer for it to write out an even smaller check to grab the leader in streaming audio?

Microsoft's aiming at Apple here. Announcing the news last night -- when Apple's attracting the world's attention tomorrow -- isn't a coincidence. Tomorrow will be primarily about new iPhones, but you just know that Apple will provide more color on the similar iTunes Radio service that will roll out with Apple's upcoming iOS update.

Microsoft didn't want to seem out of touch by tethering itself exclusively to the sliver of Windows-flavored mobile gadgetry out there, and this is the kind of announcement that is getting noticed today but would've gotten lost if it came later in the week as the market sizes up Apple's chances.

Microsoft's doing the right thing, but even arriving two days before Apple may still be too late for a market that has already sided with Pandora and Spotify over what all of the tech giants think consumers want.

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  • Report this Comment On September 09, 2013, at 7:27 PM, marv08 wrote:

    "... and this is the kind of announcement that is getting noticed today but would've gotten lost if it came later in the week as the market sizes up Apple's chances."

    Well, considering that MS's app could only get into Apple's AppStore with their explicit approval, and that MS has zero influence on the timing of the approval process... I would say that the date is a coincidence, and that Apple is obviously not at all concerned.

    "Microsoft's doing the right thing, but even arriving two days before Apple may still be too late for a market that has already sided with Pandora and Spotify over what all of the tech giants think consumers want."

    A strange conclusion, considering that iTunes makes easily ten times more money from music sales and has at least 5 times more users, than MS, Pandora and Spotify combined. I guess Apple does know better than anybody else what consumers want.

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