Microsoft ponders creating an iPod killer

Businessweek is reporting
that Microsoft is considering whether or not it should start producing an iPod type product of its own in response to Apple's runaway success. The Microsoft party line has been that people want choice, and enjoy having to pick between 150 'Plays for Sure' media devices that offer no true distinguishing features. Apple's model of a simple product line and seamless integration between the player and the service has worked out fairly well;  Microsoft thinks it might be able to do the same.

MS is considering leveraging the XBox brand to create a mobile device that would integrate with the XBox and offer up media playback (kind of like the PSP, I assume). Will Microsoft actually do this?
Time will only tell, but if they do they run the risk of pissing off a boatload of 3rd party developers that would be hard pressed to compete with a product straight from the labs at Redmond.