And yet another iPod contendor could possibly stun the markets, with Microsoft planning something for CeBIT. Though this isn't completely substantiated, on the 9th, Microsoft is expected to demonstrate a rival iPod-like player, most likely with video capabilities as well considering its large 8" screen.

The New York Times news-paper on Friday said the new device is a smaller incarnation of a tablet personal computer designed primarily for entertainment. According to the report cited by Reuters, the first models will have roughly 8” (20.3 cm) screens and sell for about $1000 each, depending on the functions. Later versions may be smaller, with 4” screens.
To me, that doesn't sound like a carry-along mp3 player, but more like a handheld. It definitely sounds interesting, but I doubt it could be a serious contendor for the iPod, which has size as one of its key selling points. The features on the Microsoft device look pretty varied: drawing, videos, music, games, email... a smaller PDA, perhaps?