Microsoft has been developing its own hand-held music and video player to challenge Apple Computer's iPod and expects to have it in stores in time for the holiday season. It is supposed to have a better screen and will compete on video, too.

Microsoft's digital device would be equipped with at least one feature the iPod lacks: wireless Internet capability that would allow users to download music without being connected to a PC.

A senior executive at a major TV network said Microsoft had not yet received commitments from the networks to supply programming to its online store. But the executive said that the networks would welcome competition for Apple in downloads.

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