HP's move to release an own-branded digital-music player based on Apple's iPod – and to ship iTunes pre-installed on all HP PCs – has angered Microsoft.

General manager of Microsoft's Windows digital media division David Fester has suggested that iTunes' emerging dominance would be bad for consumers, because it would limit them to the iPod.

He told journalists at the Consumer Electronics Show in Las Vegas: "Windows is about choice - you can mix and match software and music player stuff. We believe you should have the same choice when it comes to music services."

Fester also said that HP would confuse its customers because the company supports several other Microsoft media products that are not compatible with the iPod, including its Windows Media Centre software.

According to the New York Times, Dell also suggests HP is making a mistake. A Dell spokesman said: "We expect competition and it's good for customers. Over time, however, customers will want industry standard choices.''

HP believes that it is better positioned than any other company to bridge the gap between Apple and Windows. Fiorina told the Times: "The next big thing isn't the next gizmo or killer app or hot box. Customers want all this to work together and they want a seamless approach. We're very much going to make sure that the Microsoft and Apple worlds work together. That's part of the power we bring to this thing."

According to the Times, several industry executives said that HP had been trying to create and market a competitive digital music player but could not do as well as Apple.

According to The New York Times, the announcement demonstrates to Microsoft that software partner HP "will not necessarily follow its lead in every case".

The agreement also marks Jobs first move away from the Apple-only strategy he has pursued since he returned to run the company in 1997.

The New York Times describes the partnership as a "coup for Apple". It states that: "The move gives Apple, which has long been pigeonholed as a niche player in the personal computer industry outside the Microsoft- Intel mainstream, access to major marketing channels and retail chains where HP has a powerful presence."

HP gets "instant access to Apple's technology and music rights and the opportunity to offer a full range of popular digital products to consumers while gaining newfound independence from Microsoft and a significant advantage over Dell Computer, which sells its own music players only online."

WMA for iPod?

A report in Connected Home Magazine has suggested that HP's deal with Apple will have one other side effect: "The company will be working with Apple to add support for Microsoft's superior Windows Media Audio (WMA) format to the iPod by mid-year."

Currently Windows PCs use Microsoft's Media Player software to digitize music using the Windows Media Audio (WMA) format. iTunes uses Dolby's AAC digitisation system. Neither player can play songs stored in the other format.

According to The Independent, analysts had forecast that Apple's format would lose out to Microsoft because of the sheer volume of Windows PCs.