Microsoft is ready to take the fight to Apple in the digital music market by flexing its financial muscle.

The software giant last night confirmed it will apply all its market muscle to dislodge Apple's iPod from its leadership position in digital music services.

The company is currently preparing its invasion of the digital music market. It plans to deliver its own music-download service and a clutch of devices for music and media playback. And, as the icing on the cake, it is prepared to lose money on its mission across several years.

Robbie Bach, president of Microsoft's entertainment division, said the firm is prepared to spend "hundreds of millions of dollars" on this in the coming years.

Bach explained: "It is something that is going to take time. This is not a six-month initiative. This is something that is going to be a three, four, or five-year investment."

He also explained that the new family of Zune music players would connect with the company's other entertainment products.

He was speaking at Microsoft's financial analyst meeting, where company CEO Steve Ballmer stressed his company's commitment to trying to create success in multiple markets, a strategy Ballmer called 'multi-core'.