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Gateway to tap out photo, MP3 player beat

The PC maker is coming out with its own hard-drive-based MP3 player--a miniature unit that displays color photos. Photos: New iPod rivals

Gateway is joining the band of computer makers selling hard-drive-based digital audio players, but its riff adds miniaturization and a color screen for displaying photos.

The company on Thursday announced its $249.99 Gateway MP3 Photo Jukebox player, which has a 4GB capacity, a 1.6-inch display and a rechargeable battery that can be replaced.

The player can connect to PCs and directly to digital cameras over a USB 2.0 port. Photos can be viewed individually or in a slide show.

Gateway is taking preorders and will begin selling the device in mid-November. The MP3 Photo Jukebox could be in retail stores as soon as the first quarter of 2005, Gateway said.

iPod, you 'Pod, everybody 'Pods...
Apple Computer has been very successful with its iPod devices and iTunes music download service, leading to imitation devices from many other companies, such as Dell, Sony and Gateway. Hewlett-Packard is selling an HP-branded version of the iPod device.

Gateway's mini player, at 3.8 by 2.3 by 0.7 inches, and weighing 3.4 ounces, is roughly the same size and weight as Apple Computer's iPod Mini, but that device does not display photos.

Apple announced on Tuesday new iPods with color screens that can show digital photos. The new iPods are bigger than Gateway's device but also have much higher storage capacities--40GB and 60GB--as well as higher prices, $499 and $599.

The Photo Jukebox is part of Gateway's convergence strategy, under which it will sell products that work with or emulate a PC.

"Gateway is remaining focused on our PCs, and we're also developing a lot of focus around convergence--products that either act like a PC or depend on the PC to operate," said John Schindler, the company's senior manager of convergence products.

He added that Gateway designed its player to offer premium features for a relatively low price--a change from its earlier strategy of hitting the lowest-possible prices on consumer electronics gear.

"Our goal is not to be a price leader in the MP3 category, our goal is to be the value leader," he said. "So we picked what the industry calls a mini form factor and a 1-inch drive...and added premium features, including a color screen. Our way of adding value in the marketplace is really in the color screen and the photo capability."

Facing Janus
Gateway's player can be used with other music services, such as MusicMatch, but it comes with a prepaid month with access to the Napster To Go music service. A monthly subscription to the service costs $14.95 and allows customers to download as many songs as they want from the service to the device.

The support for Napster's subscription service will be one of the early implementations of Microsoft's new "Janus" digital rights management technology, which allows subscribers to all-you-can-eat monthly services take music to portable devices. Napster's plan allows people to download as much music as they want, but the songs will no longer be playable after a subscriber stops paying for the service.

A few other portable devices--notably the Portable Media Center players from companies including Creative Technology and iRiver--also support the new rights-management technology, and Napster's new service.

The Photo Jukebox uses Microsoft's "Plays for sure" standard and is compatible with Media Player 10.

CNET's John G. Spooner and John Borland contributed to this report.