Investors Not So Attuned to Zune Debut

And while Microsoft is following Apple's lead by offering an integrated device and music service, it hasn't worked so well for consumer electronics heavyweight Sony (SNE Quote - Cramer on SNE - Stock Picks),which, despite inventing portable music, has been unable to change the market dynamic with its MP3 players and compatible Sony Connect store, McGuire says.

Adding to the competition is RealNetworks (RNWK Quote - Cramer on RNWK - Stock Picks), which links its Rhapsody music service with the No. 2 portable music player seller behind Apple, SanDisk's (SNDK Quote - Cramer on SNDK - Stock Picks) Sansa players.

"It's an enormous challenge," McGuire says. "It's not like [Microsoft] is just going up against a software provider or a hardware provider. They're going up against a cultural icon."

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