e.Digital Corporation (fka EDIG)

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Compaq Attacks Digital Audio
By Arik Hesseldahl
http://biz.yahoo.com/fo/010614/0614tentech.html

It used to be that personal computer companies just sold personal computers. Now they're selling stereo equipment too.

PC giant Compaq Computer unveiled a trio of products this week that it hopes will make it a serious contender in the trendy market for digital music players--a market that has put stars in the eyes of consumer electronics makers.

The smallest of the three is the iPaq PA-2, a handheld MP3 player that is a follow-up to its first effort, the PA-1. It's about on par with the other portable digital music players on the market. It comes with 64 megabytes of memory built in, or about two hours worth of music and is expandable through the use of a standard MMC flash memory card to 128 MB, or about four hours worth of playing time. It weighs in about 3 ounces and Compaq says it will run for about 14 hours on one set of batteries. The player will start shipping to retail outlets next month for about $250 and will also be sold online on Compaq's Web site.

The second of Compaq's trio of music players is the iPaq personal CD player, PCD-1. It's a lot like SonicBlue 's Rio Volt line of CD players, in that it can play both conventional compact discs that you buy at the record store as well as digital music files that you've burned onto a rewritable CD from a personal computer.

Typical audio discs can hold about 74 minutes worth of music. But when you save MP3 music files to a CD-R or CD-RW, you can pack about 300 songs, or about 20 hours worth of tunes, onto a single disc. That's a lot of listening. And should you get bored with that, the player also has a built-in FM radio tuner. You can take it with you and listen on headphones, or you can connect it to your home stereo system. It will start selling in August for about $200.

The third player isn't portable, but rather is designed to become a permanent part of your home entertainment system. It's called the iPaq Music Center, and it's a CD player with a built-in hard drive. Each time you insert a CD, you can store its contents directly on the hard drive, meaning you can play the same music later without needing the disc in the tray. The hard drive is 20 gigabytes in size, which is enough to store the contents of about 400 conventional music CDs, or about 5,000 songs.

It also has a built-in modem with two main functions: The unit can dial out to the Internet to connect to a database of CD information and automatically download the name of the album and the name of every song on it, and then display that information on your TV screen. The modem also connects the device to Internet radio and music recommendations by touching a button on the remote control.

The player is an awful lot like the AudioRequest CD player from ReQuest Multimedia. That company's player comes in three models, all with bigger hard drives than the Compaq model. ReQuest's player also lets you record CDs, but Compaq's doesn't. And it can play music stored on CD-R and CD-RW discs.

Since Compaq is a computer company, the player will talk to your computer over a home phone line network. If you have a big collection of music stored on your PC, you can transfer them to the Music Center. It's also got three universal serial bus (USB) connection ports, so you can take songs stored on the Music Center and transfer them to the portable PA-2 unit. The Music Center will start shipping to retailers in the middle of July and will sell for about $800.

Of course Compaq isn't the only PC company to embrace the digital audio craze. Dell Computer has been selling a digital audio receiver made by SonicBlue. Sony 's Vaio line of PCs work with its digital audio players. And Gateway carries a few brands of MP3 players on its Web site and in its stores. Even Intel has its own portable MP3 player. Now its Compaq's turn, and having tested the waters with its first player, the company must like what it sees in the market for digital audio.

It has reason to expect success. Market research firm Forward Concepts, based in Tempe, Ariz., has forecast that the size of the market for MP3 players will grow to about 30 million units by next year, up from less than a million in 1999. That leaves room for lots of vendors, including Compaq.