(Special Report) - A couple of days ago, we declared iPod the ultimate winner with no portable music players to take it down. However, we need to make an exception for Microsoft. As surprising as it is, at CES 2008, Microsoft's Zune is really starting to emerge as a serious threat to Apple's crown jewel. Sure, it's not going to capture the market rapidly and growth will be gradual, but Microsoft has the right ingredients. Just when Microsoft announced Xbox and its official entry in the gaming space, everybody laughed at the idea. And the joke become even hilarious after Microsoft announced its loss on a per unit basis, and how wide that was. Look at Xbox 360 now and the ever successful Halo franchise that has made Microsoft a running star in gaming consoles. The gaming industry would now feel empty without Microsoft. After interviewing with Zune reps at CES, we got the same sense of ongoing developments and a long-term strategy from them.

Naturally, they weren't as overconfident this year as they were last year at CES 2007. In fact, they were more appreciative of Apple and its developments. We think the technology industry was more humble this year for whatever reason, and a lot of companies were giving credit to their competitors. And justifiably so. If a particular company has done well, it deserves to be credited. It doesn't matter if it's a competitor or not. We are glad the technology sector is starting to become more humble with a clear acceptance for its competitors as industry movers and shakers.

Apple iPod Declared Winner at CES

Microsoft displayed a new version of its Zune social networking site, and it was impressive. The company is looking to overhaul its social networking site at least once a year with a substantial list of features. On top of that, they will continue to update it with incremental feature updates once every quarter. These will be "soft" upgrades.

The company continues to be on a track to personalize their music players with very intricate designs, and Microsoft acknowledged it might let users create their own designs, upload them and have them printed and shipped accordingly. It doesn't get any better than this.

The world's number two music maker was quiet about its Zune developments, but considering how rapidly Microsoft is learning from its previous mistakes, we are hopeful of their capabilities. It can only get better for Microsoft from this point forward, or at least we hope.

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