Microsoft's Entertainment and Devices Devision President Robbie Bach suffers no delusions about unseating the iPod this year. He says that the new Zune Updates can put the company into the solid #2 spot for the overall portable music player market by the end of the next fiscal year (which ends June 2008) now that the Zunes are "where they probably should have been last year, when they launched".
Bill Gates says that the Zune is part of a 10-year plan to build a digital entertainment business, of which the Xbox 360 is definitely a big part of. Whether they'll tie the Zune and the 360 (just like the Zune got some Media Center integration) is unknown, but probably coming.
Robbie Bach also wants everyone to know that "this is going to be an Apple-Microsoft" thing, reiterating that not just are they aiming for #2, eventually they want to be #1. [Seattle PI]