The Wall Street Journal is reporting that Dell is going to release a competitor to the iPod this fall. Dell tried this once before, but failed. What’s different?
Instead of simply selling a piece of hardware tied to someone else’s music service, as it did in 2003, Dell is working on software for a range of portable PCs that will let users download and organize music and movies from various online sources.
The music player Dell has been testing — the product’s name couldn’t be learned — features a small navigation screen and basic button controls to scroll through music play lists. It would connect to online music services via a Wi-Fi Internet connection, and Dell executives said they would likely price the model currently being tested at less than $100.
Bully for Dell. After showing off its new line of tiny PCs, Dell now has some street cred as far as design and innovation goes. Nothing close to Apple, but it’s a starting point. And if this mp3 player looks good and works well, Dell has a chance to dent Apple’s cool factor.
The real question though, is why isn’t the music industry trying to do something like this? Why let Dell, Apple or even Nokia earn the healthy margin on a gadget, while the music industry dies on music sales?
Building gadgets is totally different from selling music, but great companies adjust. Look at Major League Baseball. The stodgy old sport managed to create a technology company in 2001, MLBAM, and now MLBAM earns over $400 million in annual revenue.
The record labels have no market cap, no chance to borrow, so acquiring a small tech company is out of the question. They may have simply missed their chance, but if Dell can reintroduce a mp3 player, I find it hard to believe Universal-BMG couldn’t do something similar.
Record labels, take what’s left of your money, don’t sign 5 acts to absurd advances and put that money towards hiring a smart tech person who can build you a cheap device to sell your music. Its a long shot, but what other option do you have?
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