June 1 (Bloomberg) -- Microsoft Corp., the world's biggest software maker, is developing portable music players with NTT DoCoMo Inc., Toshiba Corp. and other Japanese companies to compete against Apple Computer Inc.'s iPod.

Microsoft is working with eight companies in Japan to offer audio players and content that is compatible with the Windows Media Technology operating system, the Redmond, Washington-based company said yesterday in a statement. Napster Japan, NTT Communications Corp. and Aoyama Capital Co. will provide content and other services, the statement said.

The partnerships may challenge Apple's dominance in Japan's 34.3 billion yen ($304 million) Internet music download market. Microsoft's link with DoCoMo, Japan's biggest mobile phone company, and electronics maker Toshiba may give its music software and media business a bigger foothold in Japan, where more people access the Internet from mobile phones than from personal computers.

Japan's music downloads rose to 10.5 billion yen in the fourth quarter of 2005, up 58 percent from the beginning of the year, according to the Recording Industry Association of Japan. Mobile phones accounted for 94.3 percent of all music downloads in the year.

Apple's iTunes is the world's most used online music store and the iPod is the most popular portable music player.

Microsoft began a two-month campaign yesterday at Japanese electronics retailers showcasing portable music players or mobile phones from DoCoMo, Toshiba, Victor Co. of Japan, iRiver Japan and Creative Technology Ltd., according to the statement. Users will be able to transfer music and video files from their computer to the portable gadgets and mobile handsets.

To contact the reporter on this story: Aiko Wakao in Tokyo at awakao@bloomberg.net.

Last Updated: June 1, 2006 00:52 EDT