Microsoft Zune to gain quickly, just not at Apple’s expense; Dell kills its Ditty player; Apple settles with Creative; Samsung phone guns for iPod; SanDisk player doubles nano.

August 25, 2006

Chalk up this week’s losers.

Zune’s much-ballyhooed arrival has been shrugged off. The “iPod killer” has one analyst bullish on growth—but not at iPod’s expense. Add to that the fact that Dell’s DJ Ditty, which launched the same time as Apple’s iPod nano, has now thrown in the towel. Plus, Apple has settled patent issues with Creative, turning the long-time adversary into a partner.

But don’t get too excited, you in your white headphones. There are some new Apple contenders. Samsung unfurled an MP3 phone packing a whopping 8 gigs. SanDisk revealed a challenger boasting double the capacity of nano. Will they stand a chance?

Zune No iPod Killer

Microsoft’s digital music player and entertainment strategy, dubbed Zune, which so far has nothing to show, already has some giving bullish predictions on Thursday.

McAdams Wright Ragen analyst Sid Parakh said he thinks the Zune player, expected to launch by November, could make a 10 percent dent in the worldwide music-player market by the end of 2007. “It’s an aggressive estimate; anywhere from 5 to 10 percent,” said Mr. Parakh.

Dell’s DJ Ditty Dead

PC vendor Dell confirmed Thursday that it is discontinuing its DJ Ditty, after yanking the bite-sized digital music gadget from the music-player section of its web site last week. The flash-memory-based music player was introduced last September—the same month rival Apple Computer launched the tiny flash-based iPod nano.

“The whole MP3 market has been absorbed into Apple like a black hole,” said Roger Kay, president of Endpoint Technologies Associates. “There was a market there once upon a time, and it is very rapidly converging on the iPod.”

iPod: Apple, Creative Settle

Apple Computer said Wednesday it will pay Creative Technology $100 million to settle a patent dispute, with the Apple rival cranking out accessories for Apple’s iPod later this year. The one-time license payment and business deal follows a spate of lawsuits between the two companies.

Creative has offered one of the strongest challenges to Apple’s iPod digital music players. It’s the No. 2 portable media player vendor in the world after Apple, and is in third place in the United States. Wednesday’s deal brings Creative into Apple’s ``Made for iPod`` program, creating a strong business relationship between the one-time rivals.

Samsung Guns for Apple’s iPod

Samsung Electronics has developed a music-playing cell phone with a whopping 8 gigs of storage space, according to a report. That’s double the capacity of Apple Computer’s hugely popular iPod nano music player.

Of course, Samsung lacks Apple’s deft marketing touch: the South Korean electronics conglomerate has dubbed its offering the SCH-B570. However, the device has other attractions. In addition to being able to store roughly 1,600 music files, it sports a 2-megapixel camera and can tap into South Korea’s mobile satellite broadcasting service (S-DMB).

SanDisk Takes on iPod

SanDisk introduced its latest attempt Monday at stealing market share from Apple Computer’s ubiquitous iPod: the Sansa e280, a flash-based MP3 player with double the storage capacity of the iPod nano.

The Sunnyvale, California-based memory and device maker also lowered the prices of its existing Sansa e200 line of digital music players to get a head start on holiday season sales