Can IRiver Become an IPod Killer?

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In the digital music player market things are getting more competitive by the day. At last week's CeBIT trade show in Hanover, Germany, there was no shortage of new music or multimedia players from companies from around the world--and each company hopes that their product is the "IPod killer."

Despite this competition, Apple Computer's lead in the market remains strong. Whether that changes or not might be up to people like Joon Yang, chief executive officer of Reigncom. The South Korean company sells music players under the IRiver name and is one of a handful of companies nipping at Apple's heels.

Until recently the two companies weren't direct competitors. Reigncom's product line-up was mainly confined to players that use flash memory chips for storage while Apple used hard drives. However, that all changed in January. Within the space of a week Reigncom launched its H10, its first serious attack at Apple, while Apple unveiled its IPod Shuffle, a direct competitor to some IRiver players.

"We needed some product to be launched as an Apple alternative," Yang says about why he entered the hard drive-based player market. "I don't think 100 percent of people like the IPod but it's hard to find an alternative so we thought, 'Let's make an alternative.'"

Rival Products

The result of that effort, the 5GB H10, has been received well by various reviewers, who suggested that potential buyers weigh the price against its extra features. At $280, the player is $30 more expensive than Apple's 6GB IPod Mini, but offers several features not found on the Apple player. These include a color LCD screen, FM radio, photo slide show ability, and voice recorder.

Then, at last week's CeBIT show, Reigncom expanded the H10 line-up to include a larger 20GB version and a smaller 1GB version, the former based on a 1.8-inch hard drive and the latter on flash memory. The three H10 players now compete broadly with Apple's IPod Shuffle, IPod Mini, and IPod, and all carry the additional features the original H10 offers.

Reigncom has decided that such features are its best weapon against Apple, Yang says.

"I gave up competing on style and looks," he says. "If I did it would just turn into an Apple imitation. So, Apple is focused on style and I am focused on features."

But to completely forget about style would be a mistake, he says. Design of IRiver players is handled by Inno Design, an industrial design company based in Palo Alto, California, that does work for clients including Samsung Electronics, LG Electronics, and Mitsubishi Electric.

"Image is important, Apple proved it," Yang says.

Tough Competition

Yang expects the H10 will help increase Reigncom's sales of hard drive-based players to more than 30 percent of its unit shipments by the end of the year. Such players currently represent about 20 percent of the company's shipments, he said. However, while Yang sees hard drive player shipments rising, he doesn't see this growth coming at the expense of flash memory based players. Such players are still superior when it comes to durability, weight, and power consumption.

Despite the competition within the music player market, the biggest threat might come from outside.

Cell phones, for example, have offered rudimentary music players for some time and now Samsung is upping the stakes with its SGH-I300, which sports a 3GB hard drive and multimedia options to rival any stand-alone player. Sony Ericsson Mobile Communications recently announced its first Walkman handset and Motorola has been working with Apple on an IPod phone. Other devices are also trying to muscle in on the market, such as Sony Computer Entertainment's PlayStation Portable, which includes a digital music and movie player.

Yang kept his cards close to his chest when asked about an IRiver-powered cell phone. However, he says the company is planning to launch its first convergence product this year. The device will work as a portable music player and also have car and home configurations and carrier and content components.

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