iPod Rio Bites the Dust

[rdowns]

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.

 

[iGary]

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.

Creative is next.

 

[rdowns]

Based on their financials and numbers, no doubt.

 

[iGary]

Based on their financials and numbers, no doubt.

Yup, and with the blitz that Apple will put together for the holiday season, I'd say first quarter of next year is about the time.

 

[PaRaGoNViCtiM]

Trying to compete with the iPod is just incomprehensible to me!

 

[Sun Baked]

Trying to compete with the iPod is just incomprehensible to me!

Especially now since Apple is rumored to be doing some controlled expansion of iTunes, the phone and Google.

If Apple follows through on this it'll strengthen iTunes as a force ...

Then if the whiners get their way and plop WMA onto the iPod, then there will be no need at all for Creative -- since Apple could dominate both the Fairplay and MS sites.

Sort of hard to compete if you don't see a niche to exploit, capturing marketshare is always painful if you simply don't get it.

 

[Stampyhead]

D&M, the maker of premium audio brands Denon, Marantz and McIntosh...

Ha ha, the irony...

 

[corywoolf]

Especially now since Apple is rumored to be doing some controlled expansion of iTunes, the phone and Google.

If Apple follows through on this it'll strengthen iTunes as a force ...

Then if the whiners get their way and plop WMA onto the iPod, then there will be no need at all for Creative -- since Apple could dominate both the Fairplay and MS sites.

Sort of hard to compete if you don't see a niche to exploit, capturing marketshare is always painful if you simply don't get it.

I have this idea that WMP/WMA will be finally playable in itunes with the release of Mactels, but it will only be supported for the mac edition. Wouldn't that be a smart idea, it would allow true compatability between Vista and OS X. And it would encourage windows itunes lovers to jump ship on there next PC purchase. Then after a year or two (when Leopard is released for Dell's, HP's, Etc.) it will be standard on both the itunes windows version and mac version. With the amount of people who don't upgrade much (i.e. Windows 95), I think Apple will continue to offer it's music store and eventually video store to Windows XP, Vista, Etc. for a long time. Eventually after a constant reason for windows users to jump ship more will and iTunes for windows will be phased out. Once Dell, HP, Etc. start shipping their computers with both windows vista and leopard (or whatever OS X is at by then) the marketshare of OS's will dramatically shift. I wouldn't be surprised if apple had close to 40% marketshare within 10 years from now. Of course Apple will soon be turned over to a new CEO and hopefully they wont screw it up. A lot can happen in 10 years, if apple is consistant, it could definatley do this. Before the Intel announcement I was certain that iLife would be ported to windows and include support for WMP. But that didn't happen so who knows what's next...

 

[Lord Blackadder]

No WMA, please. Let's keep M$ totally out of the loop if possible.

 

[balamw]

Then if the whiners get their way and plop WMA onto the iPod

IMHO it's not just the whiners.

With Microsoft aiming it's big intellectual property guns squarely at the iPod, I wouldn't be surprised if this might not find a way into any resultion of such a lawsuit.

"You know that $10 we want in licensing fees per iPod? Let's make it $5 if you add WMA capability."

B

 

[mkrishnan]

"You know that $10 we want in licensing fees per iPod? Let's make it $5 if you add WMA capability."

I might be up for some horse trading. Real legitimate versions of the latest MSN Messenger, with AV, and WMP10, for Macs, in return for iPods playing WMA DRM'd music, and no royalty fees?

It seems like not such a bad idea, since Apple makes its money on hardware, and not the iTunes music store. Perhaps make it so that iTunes is still the gateway for the WMA DRM music into an iPod.

But yes, deals with the devil.... *sigh*

Oh, and MS should also throw into the agreement that they would agree to burn or otherwise destroy all source code, compiled versions, and other documents related to ActiveX.

 

[Lacero]

Between this and the iPod story about batteries being built into equipment, I'm becoming quite concerned that we are becoming conditioned to accept a lifespan for computers and electronics that is well below the achievable lifespan (with a little clever engineering) -- leading to an unsustainable future of disposable computing.
With the increasing price of oil, and consequently plastics, I can't help wondering what the face of computing is going to look like five or ten years down the line. The average computer uses as much as two circus tents worth of coal to run on any given day. Much of this is spent on wasteful peripherals we could do without, such as fancy 3D graphics cards or optical mice, but even more is being spent on processing power well beyond the needs of the average user.

Inefficiencies in microcomponent fabrication mean that a great deal of the electricity that goes into your computer is given off as heat. Techniques such as reversible or quantum computing hold much promise in the future for putting more energy into computation but today it is up to the consumer to safeguard the environment.

In a way, the argument is the same as with vehicles -- most people don't need a SUV or a top-of-the-line system but many choose to get them to compensate for inadequacies or because of marketing -- but with computers at least it is impossible to argue you are "safer" for having a faster system. Indeed, you are more likely to run viruses or worms without realizing it because you don't notice the hit in operating performance.

I've noticed that I've been holding on to computer equipment longer and longer these days. Oh sure, I have to fix a power supply here and a fan there, but besides slack engineering standards from software companies there is little reason to keep up with the hardware treadmill... and at least one compelling reason not to.

Similarly we should demand quality in design and upgradability in our portable electronics. This comes with a cost, but one that pays dividends in reliability, environment, and sustainable computing.

 

[Chaszmyr]

"(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.

The market is plenty strong enough for Apple...

 

[mkrishnan]

The market is plenty strong enough for Apple...

True, but they also have a point -- the products they make in their Rio line are very different from Marrantz, for instance. Marrantz is a status symbol. Rio is a too-cheap-to-buy-an-iPod symbol. Good move for them and for Apple. If they sold a player, it ought to be something worthy of their brand portfolio -- i.e. something that's specifically designed to address high bit-rate needs and things that are appropriate to audiophiles.