iPod rival D&M pulls plug on Rio By Scott Morrison in San Francisco
Published: August 28 2005 18:45 | Last updated: August 28 2005 18:45
The iPod??s dominance in the portable digital music player market has some of Apple Computer??s key competitors singing the blues.
In the latest sign that the iPod is overpowering rivals, Japanese electronics maker D&M Holdings said last Friday it would close the portable digital music player division behind the Rio brand.
D&M, which also owns the Denon and Marantz home audio equipment brands, said its loss-making Rio players have become ??mass market? products that don??t fit with its strategy. D&M said it was no longer willing to invest in the intensely competitive portable digital audio player market.
The company said it would stop manufacturing Rio products at the end of September. They include the Rio Karma and Rio Carbon, hard-drive based units that compete directly with the iPod and iPod Mini.
The Rio Carbon??s cool design, ease-of-use and cheaper price was well received by analysts, some of whom quietly suggested it could become an ??iPod killer?. But none of Rio??s digital music products were able to gain significant traction in the market.
iPod sales have continued to surpass even the most optimistic expectations on Wall Street, as consumers flock to Apple Stores to snap up iPods, iPod Minis and iPod Shuffles. Apple, which has shipped almost 22m units since introducing the iPod in 2001, controls about 75 per cent of the US market.
Rio??s exit was also seen as a blow to Microsoft, RealNetworks, Napster and other Apple rivals that operate internet music services based on Microsoft standards. These music services have looked to groups such as D&M, Creative Technology and Samsung to provide music players that operate on Microsoft standards.
consumers have been confused by various standards and brands ?? and the perception that not all of them are compatible with each other. On the other hand, Apple??s iPod and the iTunes online music store operate on closed standards based on the company??s own technology. ??It??s certainly a loss [for the Microsoft camp],? said Michael McGuire, analyst at Gartner. ??When one of the early leaders in the space exits the market it definitely has to be a concern.?
Creative Technology, which makes Nomad and Zen digital music players, earlier this month said the iPod??s dominance and the market??s thin profit margins hurt its quarterly results. But the Singapore company said it would still launch two new MP3 players with photo and video capabilities.
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