Microsoft to enter the multimedia device market

Bill Gates had already announced it at the CES in January, Microsoft is about to get into the market of Operating Systems for portable multimedia devices. It is actually a version of Windows XP that's been modified for that type of devices, à la Windows CE for PDAs or XP Tablet Edition for Tablet PCs.
We, now, know a little more about the release of these products, which will happen in the 2nd semester of 2004 in Europe.
They only need to find partners to build these devices, but there's no doubt that a lot will jump in that train. Creative, which was already there at the CES with a prototype of the Creative Zen Portable Media Center, and also iRiver have already signed.
It would be a shame if Apple missed the chance to challenge Microsoft on a ground where the iPod is King. Music is fine, but with the increase of the bandwidths and the dematerialization of media which begins to get into the norms, portable video would be the logical sequel to the story.
In the same way that Microsoft is going, we could easily imagine a lite version of Mac OS X for this type of device, completely integrated with an iApp by the name of iMedia (for example), which not only will manage music but also motion and still pictures. All the cards are in Steve's hand, they just need a good marketing scheme to keep Microsoft in the followers seat.