e.Digital Corporation (fka EDIG)

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[ Investment > Partners in the Making]




By studying the tastes of the new generation, Dioneer Co., Ltd. has won leadership of the MP3 CD player market

Last December, MP3 CD player manufacturer, Dioneer (www.dioneer.com), successfully entered into the domestic market with its new product,¡°Dion¡±that quickly gained the spotlight by being selected as one of the Hankook Ilbo¡¯s¡°Best New Products of 2001¡±just 6 months after the company¡¯s establishment.



An MP3 CD player is a next-generation digital music player that integrates CD player and MP3 player functions. It adds audio CD reproduction capability to the existing MP3 player and provides a variety of information on the music being played such as the names of the performers and songs through a liquid crystal display. Furthermore, the MP3 CD player has become a fashion statement for the younger generation.

The Dion MP3 CD player is equipped with a number of remarkable functions. The Dion is programmed to reproduce music from a variety of file formats including ordinary CD audio, CDs containing MP3 files of up to 170 songs, Microsoft digital music file Windows Media Audio (WMA), and others.

The¡°Easy Navigation¡±function can easily direct users to find a song from a total of 170 under a variety of categories such as¡°Directory,¡±¡°File name¡±and ¡°Bookmark.¡±The multi-language supporting liquid crystal display (LCD) window details information on the music in Japanese, English and other European languages. User convenience is strengthened through the 12-CD automatic memory function that can completely recover and reproduce previous settings by memorizing the 12 most recently reproduced CDs. It offers substantially strengthened impact prevention capability to correct what has been deemed as a weak point of existing MP3 CD players. Another strength of the Dion is its ability to reproduce music with the support of the latest Firmware upgrade.

Although Dioneer is less than a year old, its capacity to introduce sophisticated products is due to its unique background. In 1996, the Orange Research Society was launched by Samsung to study the emerging tastes of the younger generation. One development was Samsung¡¯s MP3 player, and based on the experience gained with this product, the same team came up with the MP3 CD player.

The competitive technology of Dioneer is already recognized both at home and abroad along with the marketing edge of the company. Dioneer products are already offered through a variety of sales channels including Internet shopping malls, boutique stores and large discount stores.

The company operates two overseas branch offices, one in the United States and the other in Hong Kong. The DCP-100 MP3 CD player model currently being marketed in the North American and European markets under the Dion brand name has enjoyed a high level of consumer acceptance. In addition, the CDP-200 model is being marketed in Korea, Japan and China under the¡°Digital Way¡±brand, and supplied on an OEM basis to AVC Technology, a Hong Kong business trading in the United States and Europe.

In the North American market where Dioneer CEO John Lee worked in marketing before establishing the company, the MP3 CD player has replaced a substantial portion of the existing CD player market. In Europe and Asia, interest in the MP3 CD player has been steadily on the rise. In the domestic market, 120,000 MP3 CD players were sold by the end of last year. It is expected that its popularity will soar in 2002. Average monthly sales of 50,000 units per month are projected until the end of the year to form a market five times larger than in 2001.

While demand for MP3 CD players is steadily increasing both at home and abroad, Dioneer is focusing on new product development as well as expanding its DVD and hard-disc MP3 player businesses. With its eyes set on becoming the leading digital company in the portable audio/video market, sales are expected to reach 32 billion won ($24.16 million) this year.


FACE TO FACE with Dioneer CEO Joseph Lee



1. What is Dioneer¡¯s core technology?

First let me say that our true strengths are our people, and Dioneer¡¯s core human resources are the veterans who worked in the media contents and MP3 Player departments of Samsung Electronics. In this connection, Dioneer is proud of its advanced level of specialized technology in the field of Optical Digital Audio and Integrated Audio/Video (MPEG 2/4) Systems based on high-performance DSP, the core technology of digital music devices.

2. How have you fared in over -seas markets to this point and what will be your strategy in this regard for the future?

After the successful development of the Dion MP3 CD player, the company began a promotional campaign in the United States, Canada and throughout Europe. From February, the company has focused on exporting the product. By exporting under the OEM system and the company¡¯s own Dion brand, we have achieved monthly revenues of $1 million or more from sales in Korea, the Americas, Europe, China and Japan. Meanwhile, orders for the product are steadily increasing with the launching of our full-scale export drive.

Our success has been due to the formation of a reliable network comprising overseas branches in the United States and Hong Kong, and partnerships with distributors and importers in the United States and Europe to further spur our overseas marketing effort. The company¡¯s focus is on local marketing in the United States, Canada, Germany, France, Great Britain and other European countries. Furthermore it plans to intensify its product advertising and publicity drives in Great Britain and Germany.

The ultimate objective of Dioneer is to structure a worldwide business operation by extending its marketing network to cover the Middle East, Africa, and Southeast Asia.


3. What is the ownership structure of Dioneer and what are your investment plans?

Dioneer is an employee-owned company, invested in directly by its 25 officers and employees. For the future we plan to attract 3 billion won in investment from e.Digital Corp. of the United States and two Korean venture capital companies.


4. What will be your direction for the future?

While demand for the MP3 CD player is also strong in the domestic market, our priority is to focus on exporting the Dion.

In the future, we will work on expanding the technology and markets for our DVD and hard-disc MP3 players.

We live in an era where consumers make constant demands for new developments. It¡¯s Dioneer¡¯s goal to first understand the nature and direction of these demands and then concentrate on technological development that will satisfy them. This is the only way to survive in world markets.

Updated June 1st 3rd 2002


By Kyung-Ae, Pyun / GA Communications
([e-mail])




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