Dell Downplays Report Of Music Device

Dell launched a line of MP3 music players in 2003, but poor sales prompted the company to pull the plug in 2006.
Dell on Wednesday sought to play down a report that it's developing a digital music player that would take Dell squarely into Apple's iPod turf, and said it is more focused on how to deliver entertainment services across multiple products.

The Wall Street Journal reported that in recent months, the computer maker has been testing a player that could go on sale as early as September. The player would be accompanied by an online download service and related software that Dell hopes will launch the company into a broader range of consumer markets, the newspaper said.

A Dell spokesman, however, said an MP3 player was under consideration, but a decision to launch such a product had not been made.

"We have not announced that we are going to be selling an MP3 player," the spokesman said. "We are looking into the possibility of coming up with different content avenues that can be shared across multiple devices built by Dell."

The devices could include notebooks, mobile Internet devices and "possibly an MP3 player," the spokesman said. "We're considering all of our options."

Dell launched a line of MP3 music players in 2003, but poor sales prompted the company to pull the plug in 2006. Dell also has had little luck with other consumer electronics outside of PCs, such as big-screen TVs, which it stopped selling last year.

Since the return of founder Michael Dell as chief executive early last year, the company has embarked on a consumer PC strategy that stresses "personalization," which has mostly translated into more stylish designs and multimedia capabilities common in the industry. Developing and pre-installing software that would tie multiple Dell devices to a variety of entertainment services on the Web would broaden the concept of personalization by giving customers more options to configure their computers to their needs.

The software that Dell would use is likely to come from its acquisition of Zing Systems last year. Zing technology can be used to retrieve and organize online music, movies, and photos. Dell believes it can differentiate itself from competitors by providing technology that a customer can use to get the entertainment they want across many devices. "That is something unique that's not fully offered in the marketplace right now," the spokesman said.

No matter how Dell approaches the market for portable entertainment services and devices, it's sure to butt heads eventually with Apple, which accounts for more than 70% of the U.S. MP3 player market. Apple's online music store iTunes has surpassed Wal-Mart Stores as the leading music retailer in the United States.