The battle over content protection in the music industry may still be raging, but consumers don't seem too concerned as MP3 players continue to generate good retail sales.
David Gold, dstore's chief executive officer, reports the e-tailer has shipped "hundreds" of MP3 players since introducing them to the site over a month ago.
Gold explained the sales trend is linked to the Internet user who is an early adopter of new technologies such as MP3 players. As a result, the e-tailer's new electricals department is also having success with other devices such as Palm Vx, digital cameras and DVDs.
"Generally, people know what they want [when buying online]," commented Gold.dstore ships MP3's from Creative, MPZOO, Diamond Multimedia and Pine.
However, the eletronics category still needs to find some serious growth. Gold said poor margins remain the biggest challenge for e-tailing electricals, and this category is not yet making money for dstore. "Overall, we're not profitable in each category," he said, although dstore is focusing on making a profit on each sale while managing the costs associated with doing business online."But the news appears all good for Creative, which is surprised by the sales figures of its Nomad II MP3 player, listed as dstore's hottest selling electronics item.
"We are killing them [the opposition] in the retail market, we cannot believe it," said Creative's marketing manager Nick Angelucci. "I think it is a matter of our company name being out there for so long. [The Nomad] is a good quality product and it has really been through word of mouth that its popularity has spread." The Nomad II has been in the market for less than two months, but has already made a big impact in retail sales, outselling perennial popular gadgets such as PDAs, DVDs and games consoles.
The NOMAD II player, which also includes an FM radio and voice recording capabilities, comes equipped with a Universal Serial Bus (USB) connection and hot-plugging connectivity, a wired remote, a backlit LCD, and Solid State Floppy Disk Card compliant flash memory card support.
Angelucci said the popularity of the product indicated a trend towards a more computer-savvy consumer market.
"The kids are really driving this; we have had a number of mums and dads ringing to ask about the product.
"Everyone has been caught off guard with this. The consumer market is typically apprehensive of new technologies and we have heard that this [boom] won't last, but I think the sales speak for themselves."Based on the encouraging Nomad II sales, Creative plans to launch its higher end product, Jukebox, in August.
"The age group for the Nomad is quite low, but Jukebox will probably take up the top end of the market," said Angelucci.
In regards to the current ongoing war over online music content protection, Angelucci said it was important to balance the needs of both the consumer and the music industry. The Nomad II supports InterTrust technology, which allows the transfer of files in a secure format. The licensing agreement also helps compliance with the Secure Digital Music Initiative (SDMI) for portable digital audio players, according to Angelucci.
"We are also working with a company called NoiseNet, which is becoming an independent record label, as well as investing in MP3 and digital rights management. [NoiseNet] is part of a new breed of companies promoting music through the electronic format."