Analysis provided by Theflyonthewall.com:

Amazon.com lists the most popular selling products by category. It updates the list every hour. What items are the most popular selling electronic products so far this season? iPods!

Apple Computer Inc.'s (NASDAQ: AAPL) iPod, and related accessories made up 12 of the 25 items on Amazon's top 25 list during one hour over the weekend. Microsoft Corporation's (NASDAQ: MSFT) Zune was not on the list.

Microsoft has lost search business to Google. It has lost media/download file business to Apple. Hence, 2007 will be an important year as Microsoft's new operating system Vista comes to market. Often, Microsoft has not been the company first to market and, at times, has not brought the best products to the market. However, the software giant has over time been able to battle back and become the dominant player in many sectors.

However, it appears this time around, Google and Apple have stayed a few steps ahead of Microsoft. On Monday at mid-day, Microsoft was down 33c to $29.43 while Google was down $13.71 to $491.29; Apple was down 78c to $90.85.

Recently ABI Research conducted a survey where it touted that some 58% of iPod users would consider a switch to a Zune within the next 12 months. The tagline has been passed around online.

At face value it raises an interesting question. Are iPod users as loyal as the Apple faithful? The younger, hipper adoptees of the iPod are fickle. They could ditch the device just as quickly as they took it up and made it the 'it' digital device of the last several years.

However, looking carefully at the study's methodology, worries about the iPod's marketshare diminishing drastically are set aside in favor of questions about the study itself. Dig this: the number was reached by showing participants a picture of the Zune media player and then "other competitive media players" and being asked if they would pick the Zune.

The specific mention of an iPod is not in the language. Tell you what, show me a picture of a Zune next to a turd and I'll be 100% likely to indicate a Zune preference, but it doesn't mean I'm going to buy one. We'd like to see a little more detail about the survey in question before panicking just yet.

Although Apple-faithful can always get riled up by negative information, more ripping apart of the horrible methodology of this survey can be found in the comments at Mac Daily News, the iPod Observer, and Ars Technica's forum which provides a run down of the dodginess of the survey. This is not a reason to worry about iPod sales just yet.

Tobias Buckell is an author, freelancer, and professional blogger who owns stock in Apple.

Apple ended the day at $77.01, up 60 cents and 0.79%. The big news today was that Microsoft finally set a price point on it's Zune 'iPod Killer' digital player, and the market doesn't seem impressed enough to dock Apple's price. It's quite clear investors don't seem all that worried. In fact Apple's price picked up as the announcement concerning the Zune was trickling out throughout the morning news. If that isn't a sign of how strong iPod brand belief is for the Apple stock future, what is?

The other piece of news for Apple was the announcement of a royalties agreement in the UK that should smooth over differences in digital music downloading over there.

Apple ended the day at $67.31, down $0.31. Today was another mixed day for Apple as various press outlets are still focused on the stockholder lawsuit against Apple for the backdated stock options scandal. The good news was another customer satisfaction survey came out with Apple at the lead. PC Magazine's 19th Annual Reader Satisfaction Survey found Apple to have the most reliable PCs and best support for when things go run. And despite the highly reported Apple flaws this year with their MacBooks, PC Magazine's readers only reported a 5% repair rate which was quoted as being 'astonishing.'

The other bit of good news is that Apple is having trouble meeting the tremendous MacBook demand that is out there, as reported by the Apple Insider. Keeping in mind that this is an Apple rumor site, the article does provide some insight into the high demand for the MacBooks. And my favorite headline so far today comes from the IT Wire: SanDisk has an 8GB player so what? Every month a new 'iPod Killer' comes and goes, SanDisk is just the latest of a long line of unrealized anti-iPod champions. Don't get worked up about the next one.

Well, it took long enough. Microsoft has formally come out and formally admitted that it will be trying to take on Apple's popular iPod player this year yet with a Microsoft media player. A statement talking about and confirming its plans came out just today. Certainly everyone has been aware of this and speculating about the details, but it's nice to see the formal acknowledgment.

The player will be released as part of the Zune brand. The interesting note is that J. Allard, the vice president of the Xbox team, is involved in this, which means Microsoft is trying to replicate its success in becoming a gaming company, and that this is certainly indicative of Microsoft worrying about becoming a media and entertainment company as much as an OS company.

The statement mentions trying to duplicate the iPod's ease of use and simplicity. But I'll believe that when I see it.

Half of the fun for Apple users comes at times like this. With a month to go before the World Wide Developers Conference (referred to as WWDC) where Apple often announces some new products, rumors about what will be revealed by Steve Jobs on the stage are running rampant.

Apple sites and blogs will speculate on what might come out, dream about what they want to come out and list the details, even Photoshop up possible models to pass around or fake others out with. It's an entire ecosphere of excitement, and often in the middle of it some of these rumor sites will break a real tip from an Apple employee about an upcoming product.

In the most recent case it was a leak about music-media related product Apple still has yet to release (an 'iPod-killer' killer?). Apple made the case that online bloggers and website owners were not real journalists, and therefore did not have any legal protection in refusing to give up their sources. However a panel of judges recently affirmed that online journalists were still journalists and had that protection. Apple was not able to grab the offending email from the servers of two sites that got the information. As a result of the decision Apple decided not to pursue the matter any more.

This was first of all a landmark case for online journalism, as it sets the precedent for online reporters to have some of the same protection that their print counterparts have.

The Seattle Times has run a piece by Brier Dudley that takes a look at what details are known about the 'iPod killer' and makes it clear that Microsoft is aiming to do more than just take down the iPod. A whole line of Xbox-related items are being planned, software that plays media and integrates with media company's offerings, a device with wi-fi that plays media, and an online media service.

Sounds awfully a lot like an emulation of iPods + iTunes + iTunes Music Store. But as Brier Dudley notes with Apple and other companies becoming more than just software creators, Microsoft has to keep up. The big difference that the 'iPod killer' does have over the media combination already in place by Apple is that it looks like it will be able to play games. Something the iPod can't do. But that puts the iPod killer in competition with things like the PSP, which can already play games and do iPod-like things.

Which brings to mind this question? What is this new project exactly? The media has grabbed a hold of 'iPod killer' as a quick handle, and Microsoft is no doubt helping that along. But the PSP can do many iPod like things, but is not a direct competitor, as it is a portable game system primarily. I wonder if we're not seeing a well executed attempt to unseat Apple's media dominance, but another massive attempt by Microsoft do create a device that does everything all at once and competes with both Sony and Apple.

That might sound sexy from the get go, but it really misses the point. The iPod does well because it focuses on doing one thing well first, playing music easily. It has built on others from there. Microsoft's device sounds a bit confused about what exactly it might be focusing on doing well, while also battling two very media-savvy companies. That could be an interesting mistake.

[Disclosure: I own Apple stock at the date of this post]

Well, I've heard of schools banning kitchen knives and kicking students out for violating zero tolerance rules. I even understand the no cellphone rule, as a ringing phone disturbs class. I guess it isn't any surprise to see iPods getting attention.

Schools in Michigan are telling students not to bring iPods or other electronic devices. One reason? "Safety and liability issues." Like what, you fallen on your iPod and can't get up? This is a completely lame and ridiculous reason. If you are worried about kids ignoring teachers and listening to the devices, just come out and say thats why you are banning them, they're a distraction in class. End of story. But no, 'safety and liability' gets trotted out as the all purpose legal excuse.

And then comes the next best line, "fear of inappropriate messages" coming through the headphones. Oh no, how will we save the children from the inappropriate messages if not by banning iPods?

Again, how is this pertinent to Apple stock and image? It's amazing how wedded people are to the concept digital music player = ipod. You know a brand is entrenched when this symbolic shift starts to happen. Like Kleenex with tissue paper any story about digital music players will only mention the Apple product.

Still worried about Microsoft's iPod killer?

[Disclosure: I own Apple stock at the date of this post]

[Awesomely cute baby-with-iPod picture via Ted Johnson]

Apple finished the day at $55.77, down $1.23, or just over 2%, a strong dip down, no doubt thanks to more coverage about Microsoft's "iPod Killer" and the news that shareholders are continuing to gear up to sue Apple as the stock options issue grows larger, though it is Apple that is investigating itself and disclosing information about what happened.

The "iPod Killer" is something to worry about a small bit, particularly seeing how Microsoft threw itself into becoming a gaming company and did so well. But all the reasons iPods might be threatened, such as an increase in phone/media combinations, apply equally to Microsoft. Microsoft's entry into the field is a vote of confidence that the demand for media players will continue to be high, which means Microsoft has a lot of catching up to do in an area Apple is quite dominant. It's not time to hold our breath just yet on this one.

[Disclosure: I own Apple stock at the date of this post]

Well today the big deal for Apple was obviously the news that Microsoft is going to come out with an 'iPod killer.' It wouldn't be the first time Microsoft came in after a successful market and ended up the dominant player (can you say a leader in operating systems, number two in gaming consoles, and PDAs). They're savvy businessmen. But with Bill Gates no longer at the head, is Microsoft going to be the same company that saw openings to expand into those areas?

Apple has a huge lead and entrenched userbase with the iPod. When Microsoft took the PDA market, it was in part because Palm completely fell down several times for its users with failures to ship updated system software that kept up with media needs, and long stretches between hardware redesigns. For an iPod killer to work, Apple will probably have to fumble in order to lose its edge. It has happened, but so far the signs are that Apple is on sure fighting, scratched iPod nanos notwithstanding. It'll be interesting to see what the the Microsoft iPod killer is in the next weeks. Apple closed the day, however, at $57.56, down  $1.82, just over 3 percent. A sign that some are probably a bit worried.

On a day when everyone was reacting to Bill Gates' announcement that he'll be retiring (Peter Cohan was happy, while Michael Rogers told us it was part of a plan), the Street buzzed about how Ray Ozzie and Craig Mundie would inherit Gates' mantle, with strong leadership from J Allard, Steven Sinofsky and Bob Muglia, and rumors of a Microsoft iPod killer resurfaced, Microsoft stock moved hardly at all. It ticked up three cents to close at $22.10, still very near its three-year low. Volume, however, was extreme at 50% better than average.

So investors are paying attention, and they're acting on the news. But I'm starting to agree with Michael: Microsoft is a widow-and-orphan stock, owned far and wide but not as much by technical, analytical investors. It's safe, and whether Bill Gates is at the helm; whether the company's video players are better than the iPod, or not; whether it spends $2 or $3 billion on operating expenses this quarter, generally, we can bet that Microsoft will continue to rake in the cash and conquer the mass market with its ubiquitous software and services.