RIO MP3 Player Bites The Dust

Another key player has quit the MP3 market. D&M makers of the RIO MP3 player has said no more as margins in this sector are squeezed by the success of the iPod.D&M Holdings makers of Marantz and Denon and the recent purchaser of Boston Acoustics has thrown in the towel claiming it is quitting the market for portable digital audio players, saying poor sales of its Rio line were a drag on the bottom line.The news comes as Creative Technology struggles to survive in the same markert. (See seperate story).

D&M, said it will stop making the pocket-sized music players by Sept. 30. The sector has been dominated by Apple Computer Inc.’s iPod line.

”(The) decision to shut down the Rio business followed a determination that the mass-market portable digital audio player market was not a strong enough strategic fit with the company’s core and profitable premium consumer electronics brands to warrant additional investment in the category,” the company said in a statement.

Last month, it sold some MP3 player technology assets to memory chip maker SigmaTel Inc. D&M first said in May it was reviewing options for Rio to reduce the effect of the losses on its overall business.

D&M, 51.6 per cent owned by RHJ International, a holding company linked to U.S. buyout firm Ripplewood, will retain the Rio brand and trademark and will continue to provide service and sales support to retailers and customers of its Rio brand.

On Friday, D&M reported its net loss widened to 717 million yen for the first quarter ending June 30, from 530 million yen a year ago. Sales fell to 18.75 billion yen from 19.22 billion. It blamed the majority of its loss to the Rio business.