Code-named Mercury, the upgrade will add features to the company's Windows Media digital rights management software that sits on handhelds, MP3 players and similar gadgets. The company has had a version of the software available for portable devices since 1999, but that version has had fewer features than technology Microsoft produces for PCs.
The move is an attempt to ease the fears of record companies and other content providers who worry that anti-piracy locks used to protect online content will break down on portable devices, which don't have the processing power or software support of a computer.
"This will be significant for them," said Michael Aldridge, lead product manager for Microsoft's Windows Digital Media Division. "It is going to have a direct impact on what subscription services will be able to offer."
The problem of portable devices has been a tricky one for record companies and other content producers trying to sell their work online or create subscription services.
Most devices lack critical features found on a computer, such as a system clock. The absence of those features makes it difficult to instruct a song to expire after a given date, or set a number of times that a song can be played once it has been transferred to the device.
As a result, most of the big subscription services, such as MusicNet, Pressplay or Listen.com's Rhapsody, prevent their subscribers from moving music onto portable devices. Rioport, which already has technology for protecting content on devices, has won a few licenses from record companies to offer music for MP3 players. Analysts say the portability problem must be solved before the subscription services can become mainstream.
To begin with, the devices must be released with advanced functions, such as system clocks, built into their hardware. Many of the big device manufacturers are beginning to give their products these new capabilities.
Gartner analysts Mark Gilbert and James Lundy say that the clearest opportunities for managing digital rights lie in the enterprise
The new software will be a part of Microsoft's next full release of its Windows Media technology. Aldridge declined to give a date for that release.
In related news, Liquid Audio said Thursday that it won a patent on its own technology for anti-copying technology aimed at portable devices.
News.com's Stephen Shankland contributed to this report.