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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (8985)	6/21/1999 11:26:00 PM
From: 2MAR$	Read Replies (1) \| Respond to of 108040

NEWS of release of the new Rio from DIMD, on Weds. Volume was up 4x's today, worth a watch: Diamond's new Rio expected Wednesday By Bloomberg News Special to CNET News.com June 21, 1999, 6:35 p.m. PT Diamond Multimedia Systems is expected to unveil a new version of its Rio portable MP3 player Wednesday that carries twice the digital music as its current device. Diamond confirmed it's unveiling a "new digital audio platform" in Los Angeles on Wednesday evening. The San Jose, California-based company declined to give further details. The new Rio will hold about an hour of near compact-disc quality digital music, more when an extra memory card is inserted, analysts said. But the cigarette box-sized device won't include any of the copyright security features called for by the music industry. Like the older Rio, it will play files exclusively in the MP3 format. "The product life cycle of the original Rio is nearing the end and I expect them to announce improvements because it's a high-profile product for the company," Deutsche Banc Alex Brown analyst Philip Rueppel said. "With the legal decision, the timing is right." The announcement comes about a week after a federal judge ruled that Diamond can't be blocked from selling the original Rio, which the Recording Industry Association of America claimed is used by Internet music bootleggers. Diamond began producing the first commercially available MP3 player in November, and had shipped about 250,000 of the sub-$200 devices by the end of the first quarter, analysts said. The new device is expected to sell for about $240, but may not ship until July. Soon after the first Rio hit the stores, the five biggest music companies--Sony, Time Warner, Bertelsmann, EMI, and Seagram--launched an initiative with technology industry counterparts like Microsoft to develop an alternative to MP3 that allows people to download music from the Web, but prevents illegal copying and distribution. The so-called Secure Digital Music Initiative is expected to unveil a set of preliminary standards later this month. Already, companies such as AT&T, Microsoft, and Liquid Audio and others have developed formats for transferring music over the Web that are difficult to copy. Diamond is working with Liquid Audio and the Santa Clara-based Intertrust Technologies to add security features to later versions of its machines. "Diamond defined the industry with the Rio, and they'll continue to push the envelope," said H.C. Wainwright analyst Jason Ader. There are at least 500,000 songs in the MP3 format available on the Internet. Other companies, such as Creative Labs and Samsung Electronics, have also developed portable players. Analysts expect more to hit the market after the SDMI group publishes industry-approved guidelines for the devices. About 1 million Rio and other such devices are expected to be sold by year's end, Forrester Research analyst Mark Hardie said. Diamond is expected to make several announcements Wednesday, including additions to its music-related Web site and the official launch its RioPort.com division. The RioPort division, which will have offices in Los Angeles, will be responsible for the portable players and related Internet initiatives. Shares of Diamond Multimedia rose .6875 to 5.6875. They are down 11 percent this year. Copyright 1999, Bloomberg