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Philips, Nike lace up electronics deal

The sports-apparel company is handing off its products baton to a new consumer-electronics partner and ending its deal with Sonicblue, with which it released an MP3 player.

Nike is handing off its products baton to a new consumer-electronics partner.

The sports-apparel company announced Monday that it has signed an exclusive deal with Netherlands-based Philips Electronics, calling on Philips to develop and bring technology products to market. Philips replaces Santa Clara, Calif.-based Sonicblue as Nike's consumer-electronics supplier. Nike and Sonicblue released an MP3 player last year.

"We are no longer working with Sonicblue...We had a very good response to the co-branded products, and we're continuing our efforts with Philips," Nike spokeswoman Leslye L. Mundy said.

Mundy would not disclose the financial terms or length of the agreement with Philips.

The announcement is part of Philips' continuing effort to increase its market share in the United States, IDC analyst Susan Kevorkian said.

"This is a great opportunity for Philips to expand its market share in the United States because they can leverage Nike's brand," Kevorkian said. "And at the same time, Nike can work with a global manufacturer."

The two companies will initially work on bringing portable audio products to market, the first of which will be removable flash memory-based digital audio players as well as CD players. Plans include apparel and equipment that involve communications.

Kevorkian said Nike's demographic, athletes, is a good fit for removable flash memory-based players, which are increasingly getting smaller and don't skip like some CD-based products.

Products resulting from the deal will be available in September, according to Nike's Mundy.