inluminent

The Austin American-Statesman reports:

Dell exits MP3 business
Computer maker quietly discontinues the last of its digital music players.
By Dan Zehr
AMERICAN-STATESMAN STAFF
Thursday, August 24, 2006

Dell Inc. quietly axed the last of its digital music players last week, pulling the DJ Ditty from its Web site and leaving the MP3 business to Apple Computer Inc.’s iPod and its challengers.

The company had discontinued its hard-disk Digital Jukebox, or DJ, players in February, but it continued to carry the flash-memory-based Ditty until Aug. 17.

Dell began selling MP3 players in 2003. Its last model, the DJ Ditty, was discontinued last week.

Dell will continue to sell MP3 players from other companies, including SanDisk Corp., iRiver Inc., Samsung and Creative Technology Ltd.

“We chose to invest our resources elsewhere,” spokesman Venancio Figueroa said. “We’re going to put our emphasis in our core areas of PCs, printers and TVs.”

Apple and its iPods have dominated the MP3 player market, accounting for roughly three of every four digital music players sold, according to NPD Techworld analyst Stephen Baker. SanDisk has started to find some small cracks in iPod’s dominance, holding about 10 percent of the market, Baker said.

Microsoft Corp. hopes to make a splash in the market with its Zune entertainment devices and software due out later this year. The line will include a digital music player equipped with Wi-Fi to wirelessly download music, the company confirmed last month.

Given the way the market has moved, a digital music player “doesn’t seem to fit (Dell’s) model,” Baker said, and that’s especially the case if Microsoft finds success with Zune.

Dell entered the MP3 market with its own products in late 2003 but hasn’t had its heart fully into the digital music business for some time. Executives had complimented Apple on the iPod’s success but said MP3 players weren’t a vital part of Dell’s business.

“It’s not a big focus for us,” Chairman Michael Dell told University of Texas students in April. “We’re more focused on storage-area networks and high-performance computing than MP3 players.”

dzehr@statesman.com; 912-5932

Heh… Guess they decided it was time to get off the pot.