iPod Beware: Standalone MP3 Players' Days May Be Numbered (AAPL, DELL)

Includes: AAPL, DELL
by: The Stalwart

The Stalwart submits: Looks as though some of Apple's (AAPL) MP3 competitors are licking their wounds and retreating as reported by AP:

"No one has been able to catch up to Apple," IDC analyst Susan Kevorkian said. "Apple's ongoing dominance has made it difficult not only for major consumer electronics brands to compete, but also the much smaller brands."

Dell Inc. quietly began to phase out production of its hard drive-based audio players in December but said Tuesday it will continue to sell its flash-based DJ Ditty player, which costs $99.

We're no consumer experts, but we expect that the "Ditty" might not fare so well either. Having been Apple bears for quite some time, we must admit surprise at how poor the marketing abilities of other mp3-player makers have been. Dell's not the only one bowing out:

MP3 player pioneer Rio has retrenched as well. Last fall, its parent company D&M Holdings withdrew from the portable player market to focus on higher-end home audio products.

Still, perhaps these MP3 competitors aren't so much worried about Apple as they are about their overall product segment. The stand alone MP3 player's days could be numbered as MP3-capable mobile phones multiply.

Apple has just recently continued what has been a sharp decline in price for digital music functionality. Remember $500 iPods? Now it just makes more sense to get a good 4 gigabyte Nano for $250. Dell and Rio's actions may not necessarily be signs of further success for Apple, but maybe more a sign of the product segment's upcoming demise.

Not to say that Apple can't milk a few more quarters (if you made us guess, 2 years?) of remaining value...

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