Two years after discontinuing sales of its DJ line of digital music players, Dell plans to launch a new effort to snag a piece of the digital music market from Apple with its own device this September, according to a Wednesday report in the Wall Street Journal.
Citing details provided by several Dell executives, the report describes a company stung by past failures and intent on not repeating past mistakes. The player’s design will include a small screen and simple buttons to allow users to flip through the music library. It will reportedly retail for less than US$100 and will connect to an online music service, also created by Dell, using a WiFi Internet connection.
With this latest effort, the company is putting as much emphasis on the development of its software and music service as it is on building the MP3 player. The service could support a range of devices such as portable PCs. In addition to music, the Journal reported, the new music service will offer a subscription service that will enable users to download songs and transfer them between other devices including computers and mobile handsets. It will also offer movie downloads for PCs.
Second Time’s the Charm?
Dell decided to enter the fray again in an effort to fill the needs of consumers who have not taken to the iPod, according to Rob Enderle, principal analyst at Enderle Group and a consultant working with Dell on the project.
“The reality is that before Apple entered this segment, it was stagnating, and Apple targeted the customers who weren’t buying Rio or Creative products,” Enderle told TechNewsWorld. “The majority of people still don’t have any MP3 player, and many who do have iPods rarely use or refresh them but still like to listen to music. Dell is going to avoid the typical mistake of trying to chase Apple and try to instead go after those that Apple isn’t really addressing.”
The company’s determination not to repeat the mistakes of others in the market have left Dell with no firm decision on the design, functionality and features of a possible music player, he continued.
“They haven’t actually decided to do a player yet; the work that has been done so far is on the service. The device or devices are in flux. While you can build a better MP3 player than an iPod, you can’t build a better iPod than an iPod. So how do you get people to compare your device against a real ideal rather than the competitor’s product? This is what has Dell struggling with — whether they should actually build the device or partner with others at the moment,” Enderle said.
However, if Dell does roll out a digital music player, it will launch a line of players as opposed to a single device, he added.
“The market likes lines, so if they eventually do a device, they are eventually likely to create a line of them,” Enderle noted.
The Music Service Is the Golden Egg
Dell’s decision to focus on providing software and a music service is an attempt to capitalize on perhaps the weakest link in Apple’s iPod strategy — iTunes.
“iTunes has several competitive problems. It can’t do subscription, it is still [selling] mostly DRM [digital rights management]-protected tracks, and the model it is based on requires you have a PC or an iPod regardless of where you want to listen to your music. In a world where increasingly, folks are getting the PC out of the mix, iTunes just doesn’t yet play. It also forces folks to manage their music when people generally just want to listen to it, which is why iPods are so rarely refreshed and often stale,” Enderle pointed out.
While the model for iTunes was a music store, the model that Dell is using to counter the market leader is one of a Music Mall, he said.
Dell plans to partner with DRM-free music download services such as eMusic, which could set up shop in its music mall.
“[That] is all part of the plan, the DRM music will be connected to services. The music you buy will likely mostly be DRM free. A key message that will probably surround this offering is freedom,” Enderle said.
The project, however, is not yet complete, he stressed.
“There are a lot of parts to this thing that are in different stages of completion and where final go/no go decisions are still in the future. One thing that’s clear is that Dell has studied the mistakes of the past and Apple’s success and are in the process of crafting something that takes both into account. But realize that ‘in process’ means exactly that — this isn’t cooked yet. They are still working on the recipe. But, given they are doing this in components, once the recipe is done, things should happen really fast,” he concluded.
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It seems that again, Enderle doesn’t understand the area he’s talking about. His biases get in the way too often.
This will fail for Dell, because it offers nothing compelling for customers.