Apple is by far the 700-pound gorilla in the digital audio player (DAP)
market. Apple's lead in the field is staggering, according to analyst firm NPD
Group Apple holds a massive 71% of the U.S. MP3 player market.
The second place firm in the rankings is SanDisk with a mere 11% of the
market. Microsoft and its Zune player hold only 4% of the MP3 player market.
Sony and Creative bring up the rear with a paltry 2% of the market for MP3
players each.
Sales of Microsoft's Zune players were so low for GameStop that it stopped
selling Zune players altogether. Dell was once in the DAP market and pulled
out in 2003 after poor sales left it with a tiny fraction of the MP3 player
market.
Despite Dell's inability to compete in 2003, it has announced it may
enter the DAP market again. The Wall Street Journal reports that
this time Dell says it won’t try to compete with the iPod head on. Dell says
this time -- if it enters the DAP market -- it won’t simply sell hardware as it
did in its failed 2003 attempt. Rather, this time Dell will sell a music player
that will work closely with Dell software for a range of portable devices --
including PCs and cell phones -- allowing users of the Dell device to download
and organize music from multiple sources and share it with multiple devices.
Dell says that it is currently testing a DAP with volunteers and that the
player in its current form would hit the market for under $100. Details on the
new Dell player are scant right now -- the name of the device isn’t even known.
What is known is that the Dell DAP would feature a WiFi internet connection
allowing for mobile music downloading when a signal is available.
Dell says that its software would also allow users to download movies and
watch them on a PC. Dell won’t say exactly how it intends to generate profits
from the DAP and software according to The Wall Street Journal. Dell
could try to make money off the actual hardware sale or it could try to
generate profits form a subscription-based music service or sales of movies and
music.
