Dell quits the portable music gadget market

Thursday, August 24, 2006

This definitively is not a great moment for Dell. The Texas based company recently launched the largest recall in the history of the consumer electronics industry and reported substantially lower profits due to its competition.

Now they have also announced that they will not produce portable music players anymore. Dell will however continue to sell the devices manufactured by other companies (like Samsung, SanDisk and several others).

Less than one year ago Dell presented the Digital Jukebox Ditty, a gadget whose goal was to erode significant market shares from Apple’s iPod Shuffle.

At first it seemed well positioned to do exactly that. It was priced 99 US dollars and had more features than the Shuffle: it could store more songs, had a 1-inch LCD display screen and an FM radio receiver.

Despite this the DJ Ditty was not well received and eventually its low number of sales convinced Dell to pull the plug (Dell did not announced the reason behind the move though). Probably one of the main drawbacks of the gadget was the Dell sales model that does not give the chance to test the device before buying.

When it comes to personal computers and other related components it may work but it is not a case that several Dell product for the portable devices market had sales problems. You would think that a big company like Dell would try to modify its approach at least for these gadgets but recently one of their top executives said nothing will change.

Considering this the Dell shareholders will be quite happy with the decision to cut a dead wood. I am also sure that other players in this market will be happy too for different reason.

Dell in the future will have the chance to better promote the products of SanDisk, Samsung and the other gadget makers (hopefully raising their sales). Apple on the other hand has just lost one big rival with a valuable brand and can look to expand further its leader status in this sector.