Yahoo to Feed Content to SanDisk's Portable Media Player

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Flash memory maker SanDisk Corp. (SNDK) said Monday it will pair its new wireless music player with music services from Yahoo Inc. (YHOO) but analysts doubt the new gadget will be able to steal much share from Apple Inc.'s (AAPL) dominant iPod.

Users of the Sansa Connect device will be able to use a Wi-Fi wireless connection to listen to LAUNCHcast Internet radio, browse Flickr photos and see what Yahoo Messenger friends and other Sansa Connect owners nearby are listening to.

LAUNCHcast and Flickr are both part of the Yahoo network.

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With a single click of a button, Sansa Connect users can access Yahoo's free music services or its Yahoo Music Unlimited To Go subscription service. Users also can download music and listen to or download tracks friends are listening to or recommended.

SanDisk is optimistic its new product could tap millions of existing Yahoo users.

"We see this as a very strong partnership with Yahoo," said Eric Bone, a senior director of product marketing for SanDisk.

Apple's iPod, however, continues to dominate the portable music player market with a more than 70 percent share in the United States, though SanDisk rose quickly over the past two years to rank second with about a 10 percent slice of the market, according to market researcher NPD Group.

"There isn't a killer non-Apple product out there that will appreciably change the direction of the market share," NPD analyst Stephen Baker said.

Separately, Apple said Monday it sold its 100 millionth iPod.

The iPod wasn't the first digital music player when it debuted in 2001, but it broke from the industry mold at the time by offering an unprecedented 5 gigabytes of storage in a gadget about the size of a deck of cards. Its ease of use, slim designs and tight integration with the iTunes software and online store helped catapult the digital music market.

"We knew the iPod would be unique and very special and very far ahead of our competitors, but we never dreamed it would be this successful," Greg Joswiak, Apple's vice president of iPod product marketing, said Monday.

Others, including Microsoft Corp. (MSFT) and SanDisk, have since mimicked Apple's integrated approach of software services and hardware. SanDisk, which has always supported music services that are based on Microsoft's Windows formats, introduced models that were more tightly integrated with RealNetworks Inc.'s (RNWK) Rhapsody subscription service.

With the Sansa Connect and Yahoo partnership, SanDisk is offering Wi-Fi and community-like sharing features iPod doesn't have.

SanDisk seeks to boost its market share but remains realistic about Apple's dominance. It aims to target people who haven't yet bought an iPod or may not like some of the restrictions with Apple's products, including their general inability to play music from rival services.

"We've been in this business for over two and a half years and we've been happy with the initial growth," Bone said. "But we're going from a fast-follower mode to a technical-leadership mode, and who knows where that will bring us."

When the 4-gigabyte Sansa Connect is not connected to a Wi-Fi network, the player behaves like a traditional flash music player and can be connected to a personal computer. Users can play music and view photos stored either on the player or on an optional microSD card.

Users can also listen to subscription music from any service using Microsoft's PlaysForSure system.

The Sansa Connect is available for $250 in the United States and will be available in Canada later in the year.