HP to launch music store, digital music player

HP to launch music store, digital music player

Following the lead of its competitors in the PC industry, Hewlett-Packard (HP) plans to announce a digital music player and music store along with a line of digital televisions early next year, a HP spokeswoman said Wednesday.

The spokeswoman declined to provide details on the new products, but said HP will make some "exciting announcements for consumers" at the Consumer Electronics Show in Las Vegas in early January.

PC companies have shifted their attentions this year to the robust growth rates of the consumer electronics market. Gateway Inc. has embarked on an aggressive plan to drum up new sources of revenue from digital televisions, digital cameras, and music players. Dell Inc. has also launched digital televisions and music players, along with a music download service in partnership with Inc.

And while it doesn't sell as many PCs as Dell or HP, Apple Computer Inc.'s iPod device and iTunes music store provided the model for both companies to enter the music market.

HP's consumer electronics efforts to date have mostly focused on the digital photography market. The Palo Alto, California, company's printer division is its most successful in terms of profitability and market share, and HP has sought to build off that strength with digital cameras, printers, and PCs that help consumers create, edit, and print digital images.

The company signaled its intentions to enter the broader consumer electronics market earlier this year. Jim McDonnell, vice president of sales and marketing for HP's personal systems group, told IDG News Service in September that the company would likely introduce a line of digital televisions that would contain features as DVD players.

McDonnell also pointed to the music market as one of the main drivers behind the consumer electronics market, in addition to digital photography.

While many different companies have identified digital music as a hot market, the strategies for entering that market vary from company to company, and it's too early to see which plans stand the best chance of survival, said Stephen Baker, director of industry analysis for NPD Techworld in Reston, Virginia.

Digital music stores aren't generating a great deal of revenue for their owners right now, Baker said. Hardware vendors like Dell, Apple, and HP will try to build their stores by linking them to their music players, but retailers like Wal-Mart Stores Inc. and Best Buy Co. Inc. have the opportunity to supplement their in-store music business with an online download service, and therefore protect themselves against further erosion of the retail market, he said.

HP could add other features to its music players, such as expansion slots, color screens, or wireless capabilities in order to attract the higher end of the market, Baker said. Most music players sold to date have come with small black and white screens and no extra capabilities outside of storing digital audio.

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