Microsoft has reached content deals in Europe with EMI and Napster for handheld devices running Windows Mobile software for Portable Media Centers.
The devices allow users to watch videos and recorded television, listen to music and browse photograph albums on the move.
Handsets from Creative Technology and iRiver will be available worldwide in the second half of this year, and other manufacturers, including Samsung, are working on their own models.
Deals have already been made with Napster, EMI and CinemaNow for consumers in the US. Content downloaded from these services, in Windows Media Video, Windows Media Audio and MP3 formats, will be licensed for use on both PCs and the media centre products.
Windows Mobile software for Portable Media Centers is built on Windows CE .net, Microsoft's operating system designed for small, mobile products. Devices running the software are being developed on the Intel XScale technology reference design.
Content can be downloaded to the handsets from any Windows XP-based PC via a USB 2.0 link.
Creative's Zen handset will store up to 40Gbytes of content, which will allow up to 10,000 music tracks, or 175 hours of video. The Creative rechargeable battery will last for three hours watching video, or up to 12 hours listening to music, and spare batteries will be available.
A video-out link allows films and pictures (in .tif and .jpg files) to be viewed on a standard television, and an audio link is suited to both headphones and speakers. The devices from iRiver and Creative do not have built-in speakers, but Samsung's device will be equipped.
Sales of personal media players of this sort could overtake sales of straight music players by 2007, but not necessarily for the reasons that Microsoft believes, said Gartner analyst James O'Donovan.
"Microsoft is talking about how you can watch television programmes and videos on it, but I see the main benefits being in music videos and still photos. I think that as an extension of an MP3 player, being able to watch music videos adds tremendous value."
Extras such as concert clips, lyrics, artwork and interviews would also add value, O'Donovan said.
The devices will cost between £399 and £449 in the UK and €550 to €600 elsewhere in Europe. In the US, the price is expected to range from $399 to $699.
The prices are likely to drop rapidly, however, O'Donovan said. MP3 players sales are already taking off, and that will bring down the price of hard drives and other components, he said. "Plus, many consumer electronics manufacturers are taking smaller margins to get the volumes up. So I wouldn't be surprised if we see a sub-$300 price within a year."
Gillian Law writes for IDG News Service