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Philips joins MP3 player market

Philips Electronics plans to launch a new portable digital music player next year, marking the company's entrance into the burgeoning digital music market.

Philips Electronics today said it will launch a new portable digital music player next year, marking the company's entrance into the burgeoning digital music market.

The company declined to release specific details about the upcoming player, as the product is not scheduled for release until the first quarter of 2000. Existing devices from Diamond Multimedia and Creative Labs store downloaded music on up to 64MB of memory for around $200. Philips said its device will store about one hour of music on a flash memory card.

"We're working out all kinds of details," a Philips spokesman said. "Today, we're announcing our intention and plans to enter the marketplace."

The announcement from the consumer electronics giant shows that digital music's popularity is unlikely to decline. The technology lets PC users download and play music on their computers and has spawned popular Web sites such as EMusic and MP3.com, the Rio player from Diamond Multimedia, and software from RealNetworks.

Recently, Toshiba announced it would release a device of its own for music in the MP3 format, while Microsoft has said it is focusing its upcoming consumer operating system on easing the hassles associated with downloading and playing music from the Internet.

"Every large consumer electronics company is very interested in the emerging category of digital media," said Kevin Hause, an analyst with International Data Corporation. "Everyone's interested in how big this market is going to be, how it's going to evolve, and what role they're going to play."

The popular format is not without its detractors, however. Because the MP3 technology lends itself easily to reproduction and piracy, the recording industry has withheld its support, even going so far as to file suit against Diamond in hopes of blocking the release of the Rio portable player. That suit was recently settled.

In an attempt to avoid the controversy that has surrounded Diamond's Rio, Philips announced its support for the Secure Digital Music Initiative (SDMI), an antipiracy standard supported by the major record labels, as well as software developers and hardware manufacturers like Diamond. Some observers view the standard with skepticism, worried that the technology, which will filter out illegal files, will stunt the emerging market for digital music.

SDMI announced today that it has selected a watermarking technology from Aris Technology to be included in future devices to screen out illegal music.

Philips also announced that it is working with RealNetworks to integrate the company's software into any devices it releases. The streaming media firm's RealJukebox software, which allows listeners to download, play, and organize digital music, will be "seamlessly integrated" into the Philips device, according to the companies.

Portable MP3 players are relatively shockproof because they rely on solid-state memory rather than the moveable parts in a CD player, which can skip or break. In addition, the devices require relatively low power consumption, Philips said.

As a major consumer electronics company, Philips is in a good position to expand its digital music offerings beyond portable players into home and car stereo products, Hause noted.

Smaller companies like Diamond's RioPort company, which is dedicated to developing and marketing the Rio player and complementary Internet and software products, will need to partner with hardware manufacturers or consumer electronics companies to compete in the home market, he said.

"In the long run, this [market] will be owned by big consumer electronics companies and brands," he said.