Microsoft developing new MP3 players at challenging the dominance of Apples iPod MP3 player.

The Microsoft founder, Bill Gates, praised Apple’s iTunes music store and said the software giant was talking with hardware partners to create media devices that can be less expensive and easier to connect and can handle pictures and video better.

Gates said the market share for digital music players compatible with Microsoft software is around 20 percent, a figure that is lower than he would like.