e.Digital Corporation (fka EDIG)

[murgirl]

MPMan.com to strengthen brand marketing for its digital music player

As the battle for control of online music rages on, South Korea's MPMan.com, a major portable digital music player manufacturer, said yesterday it would strengthen its brand marketing in a bid to outsmart domestic and foreign rivals.
"MPMan's marketing strategy this year is to beef up its brand in overseas market," said Kim Kyung-tae, general manager at marketing of MPMan in an interview.

MPMan's move came at a time when other big rivals, including Samsung Electronics, are scurrying to grab a share in the fast-growing MP3 player market.

MPMan, a forerunner in the production of MP3 players, is likely to benefit from the continued growth of the market despite the gloomy economic outlook.

"We estimate about 2 million MP3 players were sold worldwide last year, double the figure a year earlier," Kim said, adding that this year will see the volume increase by at least 50 percent to 3 million units.

Given that commercial MP3 players, designed to compress CD-quality music into an easy-to-use digital format, first hit the shelves in March 1998 in Korea, the growth rate is impressive.

This robust growth has finally pushed local electronics giant Samsung Electronics to begin promoting its MP3 players in overseas markets.

Just as controversy and online music often go hand-in-hand, Korea's MP3 player market has had plenty of problems.

Samsung virtually controls the market with its brand power and marketing muscle, while 30-odd smaller players including MPMan fight each other just to stay afloat.

LG Electronics, another major electronics maker, manufactures MP3 players but has remained on the sidelines as its management is reluctant to push ahead with the new item.

Digitalway, an MP3 player maker, ships most of its products to Samsung on an original equipment manufacturing basis. In fact, Samsung also used to provide its MP3 players to U.S.-based Creative Lab on an OEM basis.

But now a fresh development is in the offing. Intel Corp., the world's largest computer chipmaker, is scheduled to sell an MP3 player model with a 128MB memory from August this year in partnership with TriGem Computer, a PC maker in Korea.

"Intel's move to join hands with TriGem highlights the fact that MP3 players, once small electronics gadgets, are now perceived as part of a PC and its related devices," Kim said. <u/>

Kim predicted that Intel's foray into the Korean market would heighten the competition among Korean manufacturers. But the prospect does not worry him.

"The Korean market is the most competitive one in the world as there are lots of makers and dozens of cheap yet powerful MP3 players around," Kim said.

Philips and iomega have tried to settle down with their MP3 players but their presences are far from noticeable yet.

While Samsung, MPMan and other MP3 players have fought fierce battles in the domestic playground, the global market was greeted by a leading brand, Rio.

Rio, a brand which first created the media buzz about MP3 digital music, is now owned by Sonicblue, whose global market share is about 50 percent.

The MP3 player market's growth is partly due to the surge in demand for digital music on the Web.

Napster Inc's troubles in court, brought about by disgruntled music labels, highlighted how much influence the MP3 format has on online music buffs.

In a sign of how quickly the industry has shifted to embrace the Web, Vivendi Universal on Sunday said it would buy its one-time legal foe Web music company MP3.com for $372 million to bolster its online business.

The Vivendi Universal move underscores how fast the music conglomerates are now moving to get their songs online after fighting tooth-and-nail against Web companies for doing just that.

Control over the flow of music and music sales has long been a subject of contention as those who secure the standards can make huge commercial gains in the future.

Meanwhile, there are several digital music formats being being tested by companies including Microsoft.

Microsoft plans to limit the quality of music that can be recorded as an MP3 file format in the next version of its personal computer operating system, Windows XP, in a bid to promote its own format, Windows Media Audio (wma).

"We are now trying to support different digital music formats but there would be only one winner in the format competition," MPMan's Kim said.

MPMan hopes to take a 10 percent global market share this year, he said. The company, spun off from Saehan Information System in January 2000, has a paid-in capital of 8 billion won and posted about 20 billion won in revenue last year.

MPMan expects its market position will solidify this year as it plans to charge a royalty fee for MP3 technology used by domestic and foreign MP3 player makers if the court upholds the company's argument.

In a recent development, Sonicblue notified MPMan of its intention to support the latter's efforts to claim its patent right over digital music player.

MPMan expects about 50 billion won in royalties over the next three years in the Korean market alone.

The dispute came after MPMan announced it had acquired a patent for MP3 technology from the Korean Intellectual Property Office in January this year.

MPMan is reading to launch its latest, upgraded model, MP-F60, in the Korean and overseas markets in June.

MP-F60, featuring a wide variety of functions and a smart design, supports almost all the functions available in high-end MP3 players, Kim said.

The model can double as a voice-recording device, storing up to 18 hours of recordings with a 64MB memory. In addition, the equalizer sets the tone not only for MP3 music but also for an FM radio, with 20 pre-set channels.

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By Yang Sung-jin Staff reporter



2001.05.24
http://www.koreaherald.com/SITE/data/html_dir/2001/05/24/200105240021.asp


Products including Dataplay MPman
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