Apple CEO Steve Jobs thinks Microsoft will eventually be forced to make its own MP3 player in an attempt to stave off defeat in the digital music industry.

In an exclusive interview with Newsweek, Jobs says: "The problem is, the PC model doesn't work in the consumer electronics industry, where you've got all these companies and some does one thing and another does another thing. It just doesn't work. What's going to happen is that Microsoft is going to have to get into the hardware business of making MP3 players. This year. X-player, or whatever."

Meanwhile, Apple's iPod industry continues to grow - and in order to sell 14 million iPods in the December quarter, Apple had to secure components such as flash memory in spring last year.

"You've got to admit, picking 14 million in the spring of last year, when the most you've ever sold was four and half million, was a pretty big bet," he explains.

The interview also takes a hard look at Apple's newest Macs and the company's move to the Intel processor, with Jobs discussing the reason Apple used its first ever processor, the 6502: "We used it because Apple co-founder Steve Wozniak got one for free," he explained.

Jobs also observes that the new Intel chip Apple is using is a major industry advance, and says he hopes Apple continues to grow market share.