Ironies abounded when Microsoft recently criticized Apple's digital music strategy. Redmond said Apple’s end-to-end strategy, locking DRM to the iPod, restricted customers choice. Today we'll get a chance to see how much that choice is really worth, as Dell introduces its own online music store and iPod clone.
In partnership with MusicMatch's online stores, Dell will offer songs for download for 99 cents. It's also offering an iPod clone with longer battery life and a lower cost than Apple. Made by Creative, the Dell DJ player will sell for $299 for the 20 GB version after a mail-in rebate, or $249 for the 15 GB version. Unlike the iPod, it plays Windows Media files, and works with Real and Microsoft jukeboxes on the PC. Dell claims 16 hours of battery life, twice as long as the iPod.
Dell reckons that it can ship higher volumes than Apple, allowing it to work with lower margins. The iPod contributed a useful $121 million to Apple revenues in the last quarter: Apple hasn't disclosed iPod margins, but executives have said they're in line with computer sales, and the company is happy with that. Apple's gross margins were 26 per cent in the last quarter, while Dell's were 18 per cent.
While the iPod is morphing into an interesting platform in its own right, sprouting audio in and removable media support, it could be leapfrogged by the broader category of 'personal servers'. Intel has demonstrated a concept device which features built-in Bluetooth and 802.11. Doubtless Apple is aware of this, and the popular reaction to the idea of an iPod with built-in Bluetooth (see Apple's 'BluePod' - promiscuous exchanges with strangers.
But back to the present. Dell will have to execute well to match Apple's seamless integration. Both the iPod and iTunes were designed by the company, rather than licensed in from other vendors. An otherwise positive review of the Dell DJ at Tech TV notes in its Cons section, " Cannot quickly select and play all songs." Choice is a wonderful thing, but sometimes all people want is for the tunes to run on time… ®
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Dell is ready to entertain you