Dell officials told the Wall Street Journal this week that the company has been testing a new MP3 player that could become available to consumers as early as this September.
Like Microsoft and Sony, Dell has traveled down this road before without success. And given the current lack of consumer confidence due to the U.S. subprime mortgage crisis, the market outlook for consumer devices has also diminished considerably of late, according to industry observers.
However, Yankee Group Senior Analyst Joshua Martin sees no reason why Dell shouldn't launch a new MP3 player right now, as long as the device is both compelling and highly useful to consumers. "If Dell thinks it has a competitive product, then they have to release it right away," Martin said.
Drop-Dead Simple
Martin sees a potential opening for Dell if the company can use its August 2007 acquisition of device-connectivity software provider Zing to capitalize on Apple's apparent lack of plans to change its la carte iPod model anytime soon. "If Dell can use Zing to offer connectivity to free or subscription content -- perhaps offered for free with ad support -- they could create an interesting alternative to the iPod, especially if it is cheap."
Martin thinks the new Dell player also needs to sport a killer user interface. "If you are going to have a device that connects to multiple sources of content, then you need to make it drop-dead simple for consumers to use," he explained.
Some researchers believe that as the 3G iPhone and other music-playing cellular handsets gain marketplace traction, demand for music players will actually be slowing down. However, Martin said recent Yankee Group consumer surveys show that music-playing cellular handsets are unlikely to have a negative impact on demand for dedicated players anytime soon.
"Handset manufacturers all face the...

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