By Richard Menta- 1/03/01
Intel Corporation announced today that they are jumping on the MP3 bandwagon. This February the world's largest producer of computer chips will release the Pocket Concert a digital music player that will aim for the high end of the market.
Retailing for $299, the Pocket Concert comes with a 128MB of memory - double the memory of most competing players - and includes an FM radio. An optional accessory kit will also be available for an additional $59. The kit includes a carrying case, rechargeable batteries and connections for a home or car stereo.
Intel enters the already exploding digital portable market as it searches for new outlets for its microprocessor chips. The downturn in PC sales is expected to continue throughout 2001 and that has lead Intel on a journey to develop new products that function as accessories to the home computers that carry the company's ubiquitous logo. Such products can have the positive side effect of pushing users to more powerful PCs sooner.
This concept called "extended PC" will be the topic of chief executive Craig Barrett's keynote address to the Consumer Electronics Show in Las Vegas this week.
According to Intel the PC is "extended" through any line of products that can either be contained within a computer or connect to it. With the MP3 portable sales expected to grow to 6.7 million units by 2003, it was one of the more promising areas to grow Intel's product line.
IDC analyst Bob O'Donnell feels this strategy is an important one now that the PC industry is struggling with a slowing economy. A focus on PC accessories will help them better weather the downturn. "Those who bought a PC in the last year or two, they're not feeling the need to buy a new one, but they might want a new device to use with their existing PCs".
Still, there is no guarantee of success in the digital music arena. A year ago there were only several MP3 products maufactured, but that number is expected to hit the triple digits in 2001.This includes many traditional electronic manufacturers like Zenith and Aiwa who are yet to release an MP3 product. Many analysts expect a shakeout in the MP3 portable market soon with electronic giants like Toshiba and RCA, fighting computer manufacturers like Compaq and Intel, fighting MP3 pioneers Rio, Creative, and Sensory Science. Nonetheless, look for more PC manufacturers to announce MP3 products over the next quarter.
By next Christmas we may see a glut of MP3 player units, all with well established brand names and product visibility fighting for your business. The positive side of all this is that not only will it push prices down faster, it will also speed up the evolution of MP3 products in general as each manufacturer searches out niche categories to develop.
As ugly as a shakeout might get for manufacturers, there will be one winner. That winer will be the consumer, especially Napster fans priced out of the expensive MP3 portable market.
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