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Dell is ready to entertain you

Music store, player and TVs on tap

Dell is charging into some unfamiliar territory, announcing a host of home entertainment products set for launch later this year.

The company known best for moving bland PCs and servers with unparalleled efficiency now thinks it's ready to play in a few markets where design and strong UIs count. In the U.S. Dell plans to roll out a digital music player, an online music store, LCD TV and computer screen and a fresh projector -- all arriving by the holiday season. The rest of the world can expect to see similar products sometime next year.

Dell has caught on to some sweeping market trends with this ambitious roll out. Sony has long dabbled in both the computer and consumer electronics space. Apple and Gateway are trying to mimic Sony's success with various consumer products of their own. Apple, for example, has the iPod music player and iTunes music service, while Gateway is going the flat-screen TV route.

Sony and Apple would seem to have the clear edge in targeting consumers. Both companies know how to make flash, solid gear. They may not be the "low-cost providers," but cheap is not always what consumers are looking for with their gadgets.

With something like a printer, Dell has a more natural edge for tapping into new markets. It can play off Lexmark's R&D, rebrand the kit and then use its PC volumes to gain a distribution foothold. Operating a finely tuned and interesting music service is a different matter altogether. Even with the backing of a nice Asian design house, we have our doubts as to how well Dell can compete in the entertainment space.

Dell promises to price its music service inline with Apple or Real. Consumers will be able to play the songs on their PCs or Dell's upcoming Digital Jukebox device. With a catchy name like that, you can begin to see the problems.

On the LCD TV front, Dell will roll out the 17-inch Dell W1700. Its new projector will be called the Dell 2200MP.

In addition, Dell plans to ship a new handheld called the X3, which will be a thinner version of the troubled X5.

Analysts say these are natural moves for Dell, and in many ways they are right. Why not apply its muscle a little farther down the food chain? But again, consumer electronics require a certain magic touch that Dell has not proved it can pull off.

In any case, it's amusing to see computer makers and software companies barrel onto the music service scene. While the labels are busy suing music buyers, companies such as Apple, Dell and Real are stepping right in to pick up the business. Everyone will be getting a cut of the action, eating into the margins the labels could have once owned outright.

With so many services cropping up, users are sure to be scattered across the board. Maybe the RIAA is rethinking its anti-Napster strategy now. Wouldn't it have been nice to have tens of millions of rabid music fans in one place? ®

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