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RCA, Creative beef up MP3 offerings

The new players underscore the growing expectations for the digital music market, which to date has been dominated by Diamond Multimedia's Rio player.

The digital music industry continued to heat up this week, as RCA and Creative Labs unveiled new portable MP3 players.

The new players underscore the growing expectations for the digital music market, which to date has been dominated by Diamond Multimedia's Rio player. As major record labels make popular artists' recording available online and better-known manufacturers begin shipping products designed to play digital songs, the market for these players is set to explode, analysts predict.

Diamond introduced the Rio about a year ago, and it's on track to ship 500,000 units this year, the company says. But next year the company will face much tougher competition: Sony, which kicked off the portable music player market with its Walkman 20 years ago, will introduce its own digital device early next year. In the meantime, Creative Labs and RCA are upping the ante with new players.

Both manufacturers are touting the flexibility of their respective portable players, a key feature given the state of flux of the digital music world. Although MP3 music has gained popularity because of the ease of copying and sharing high-quality songs via the Internet, record labels have been slow to embrace the format because of the potential for rampant piracy. A record industry trade group even filed suit against Diamond, alleging trademark infringement, but the suit was later dismissed.

Although the device manufacturers and record labels are working on a specification for copyright protection, the efforts have been marred by infighting and delays, sources say. Both Creative's new Nomad II and RCA's new Lyra are designed to offer support for that standard, dubbed SDMI (Secure Digital Music Initiative). In addition, both devices can be easily upgraded to play new formats of music, according to the companies.

Creative's Nomad II builds upon its well-regarded Nomad, released last summer, by offering faster connections to the PC and support for Microsoft's Windows Media, an alternative to the MP3 file format. The device, which will be available early next year and also offers FM radio and voice recording capability, will retail for $400.

"Our goal at Creative is to continue MP3: Sound and fury leveraging our expertise in digital audio to offer the best solutions for the ever-changing audio market," said Hock Leow, chief technology officer at Creative, in a statement.

RCA's Lyra, which began shipping this week, is the company's first player. RCA, which claims credit for developing the MP3 format, delayed the release of the player until the record industry became more enthusiastic about releasing popular songs digitally, executives said this week.

In addition, the company wanted to make sure the Lyra could be upgraded to play any new formats which are introduced, and to support larger flash memory cards which are expected in the future. While most players, including the Lyra and the Nomad II, are limited by 64MB memory cards, RCA executives said they expect that larger memory capacity will be available in the future.

"With the ability to be upgraded by software downloads, RCA Lyra owners will enjoy unmatched flexibility," according to Mark Redmond, vice president of worldwide audio products for Thomson Consumer Electronics, RCA's parent company.

The Lyra plays both MP3 and Real Audio's G2 format and is bundled with Real's RealJukebox software. The device will initially only be available with 32MB of memory included, priced at $199. Philips also discussed the possibility of home and car stereos designed to play digital music, available in the future.