Dell Backs Out of Portable Music Player Market

DALLAS – Dell Inc. (DELL) has quietly pulled the plug on its DJ Ditty music players, less than a year after the world's largest computer maker launched the device to compete with Apple Computer Inc.'s (AAPL) iPod Shuffle.

The company stopped selling the Ditty on Aug. 17, Dell spokesman Venancio Figueroa said Wednesday.

He declined to characterize the decision as Dell bowing out in the face of competition from market leader Apple. Dell is trying to focus on its core areas of PCs, printers and flat-panel televisions, he said.

Dell unveiled the Ditty last September as a better value than the Shuffle. Both devices store music on flash memory chips.

The Ditty, like the Shuffle, cost $99 at the time and included 512 megabytes of memory. But because the Dell device used an audio format that compresses digital music files more efficiently, Dell asserted it could hold up to 220 songs — 100 more than the Shuffle.

The 512 megabyte Shuffle now retails for $69, with a one-gigabyte model for $99.

The Ditty also included a 1-inch LCD display screen and an FM radio receiver. The Shuffle lacks both features.

As of Wednesday afternoon, visitors to Dell's Web site could select from a range of music players from Creative Technology Ltd. (CREAF), iRiver, SanDisk Corp. (SNDK) and Samsung. The Ditty was not available, and Figueroa said the company's entire inventory has been sold.

Accessories such as lanyards were still available at a discount.

• Click here to read about Apple's $100 million lawsuit settlement with Creative.

• Click here to read about SanDisk's challenge to Apple's iPod Nano.

Dell entered the portable music player market in 2003 but struggled against competitors. In January, the Round Rock-based company discontinued its DJ line of hard drive-based devices.

Analyst Tim Bajarin of Creative Strategies said part of Dell's problem was its direct-sales model, which prevented consumers from trying out its devices before buying.

But all manufacturers are having a tough time competing against Apple, which claims about 70 percent of the market, he said.

"It was never really a strategic product for them," he said. "It's a smart move to cut their losses and run."

Dell shares fell 8 cents Wednesday to close at $21.64 on the Nasdaq Stock Market.

Last week, Dell recalled 4.1 million laptop batteries because they could catch fire, posted a 51 percent drop in second quarter profits and revealed it was part of an inquiry by the Securities and Exchange Commission.