Dell plans re-entry into MP3 player market

Dell is planning to return to the MP3 player market it left, company executives tell the Wall Street Journal. Though not willing to disclose much about its strategy, the Texas-based company is designing a small-screen, small-control music player that would use Wi-Fi to reach online music services. The device would cost less than $100 even with wireless in place, Dell says. Unlike Dell's past attempts, the device would support multiple online music stores rather than a lone, proprietary store like the now-defunct MusicMatch.

The PC builder itself would also offer a service of its own that would include movies, though this new device wouldn't support them itself, according to the report. It would instead limit the titles to playback on a computer. Dell is said to have hired analyst Rob Enderle to consult on the strategy and is mulling prices that would either put the profit emphasis on the subscriptions or the immediate device cost.

The company is also aware of the challenge of returning to the market with the iPod's dominant marketshare and has even enlisted the help of former Apple officials for the project; jukebox software from Zing, founded by a former Apple official, will replace more generic software such as Windows Media Player for managing the player's content. Similar to iTunes' library sharing or Creative's Centrale, the software will give access to a collection away from the host computer.

The unnamed player and software, however, won't be directly pitched against the iPod, Dell consumer sales VP Michael Tatelman says. Instead, the company primarily hopes to integrate the two with the company's PCs as well as outside services. A new set of notebooks and "other devices" from the firm will come preloaded with the Zing-made software.

Testing is still underway for the device, though an ideal schedule at this stage would launch it in September and price the player below $100, competing against budget and screenless players rather than the $150-plus price range of most mainstream MP3 players.

Dell has historically fared poorly in the category. The company entered in 2003 with the Dell DJ as a reaction to the success of the iPod but never gained more than a small portion of marketshare. The company moved towards smaller players such as the iPod mini-like Pocket DJ and eventually the DJ Ditty before bowing out in 2006 to refocus on its computer business.

Filed under: industry, gadgets, audio
Other story tags: iTunes, Dell, Creative, MusicMatch