NEW YORK, Aug 26 (Reuters) - Japanese audio electronics maker D&M Holdings Inc. said on Friday it will quit the market for portable digital audio players, saying poor sales of its Rio line was a drag on the company's bottom line. D&M, the maker of premium audio brands Denon, Marantz and McIntosh, said it will get out of the market for the pocket-sized music players by Sept. 30. The sector has been dominated by Apple Computer Inc.'s iPod line. "(The) decision to shut down the Rio business followed a determination that the mass-market portable digital audio player market was not a strong enough strategic fit with the company's core and profitable premium consumer electronics brands to warrant additional investment in the category," the company said in a statement. D&M, 51.6 percent owned by RHJ International , a holding company linked to U.S. buyout firm Ripplewood, will retain the Rio brand and trademark. But it was not clear what other steps it would take in exiting the business. Last month, it sold some MP3 player assets to memory chip maker SigmaTel Inc. D&M first said in May it was reviewing options for Rio to reduce the effect of the losses on its overall business. On Friday, D&M reported its net loss widened to 717 million yen for the first quarter ending June 30, from 530 million yen a year ago. Sales fell to 18.75 billion yen from 19.22 billion. It blamed the majority of its loss to the Rio business.