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More blood on Apple iPod’s Click Wheel: Rio is dead
Friday, August 26, 2005 - 09:24 AM EDT

D&M Holdings Inc., today announced it would exit the mass-market portable digital audio player business, currently marketed under the Rio brand, by September 30, 2005. D&M Holdings will retain the Rio brand and trademark, and as previously announced the company retains access via license to MP3 player technology that was sold in July to SigmaTel, Inc.

D&M Holdings Inc. is based in Tokyo and owns the Denon, Marantz, McIntosh Laboratory, D&M Professional, ReplayTV, Rio and Escient brands. All are established brands in premium home theater, audio-video consumer electronics, professional audio or networked digital entertainment markets.

The company’s decision to exit 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 original goal of strategic advantage with wholly-owned and branded portable client devices was reconsidered in the context of the costs required to effectively scale and compete in this sector, where competition has grown intense. D&M Holdings will now focus all its resources on the core Premium AV business and advanced content server products.

"The digital audio market is evolving in such a way that our competitive advantage will be to focus on creating premium home network products that are designed for compatibility with a variety of client devices and services," said Vic Pacor, president of D&M Holdings in the press release.

D&M Holdings will continue to support retailers and customers of its Rio brand through all final sale and post-sales activities, including customer service, repair, warranty and sales channel support. D&M Holdings is committed to continuing service levels without compromise. Details of the financial impact of this plan are available in the company's latest financial results that were released today.

MacDailyNews Take: It's the natural order of things. Survival of the fittest and all that. First the weak go, then the not-so-weak. Apple's iPod is turning out to be quite the real killer: "iPod Killer," get it? That's "Mr. iPod Killer" to you, bub. And we have a feeling that iPod's about to go "serial" sooner than later.

Related articles:
Analyst: Apple will sell 7.1 million iPods this quarter - August 26, 2005
Apple's iPod has blood on its Click Wheel: Virgin Electronics is dead - March 08, 2005
Rio MP3 player business sold to Apple iPod shuffle chip maker SigmaTel - July 28, 2005
Rio faces uphill struggle attempting to nibble at Apple's iPod market dominance - December 02, 2004
Mossberg: Dell, Rio, Creative 'iPod mini killers' lag badly behind Apple iPod mini - October 27, 2004
Rio debuts 5GB 'iPod mini killer' - August 02, 2004

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Aug 26, 05 - 10:45 am Comment from: fandango

Couldn't stand up to the iPod Juggernaut®.

D&M Holdings is getting out while the gettin's good. See ya.

Aug 26, 05 - 10:46 am Comment from: jas

iPod, Killer

Aug 26, 05 - 10:48 am Comment from: cedreca

Rio means River in spanish. That's exactly were they went, down river floating like a dead corpse. Who's next!!!

Aug 26, 05 - 10:49 am Comment from: G5Man

Killer iPod strikes again.

I can just see it...all those bozo Windows apologists writing about iPod killers will soon be writing Killer iPod strikes the Dull DJ.

Aug 26, 05 - 10:52 am Comment from: macnut222

With any luck, Creative will be next.

Aug 26, 05 - 10:53 am Comment from: William via iPodDailyNews

Creative might not be on deck, yet. One of the smaller players probably is next, but Creative's definitely in-the-hole.

Aug 26, 05 - 10:56 am Comment from: hagar57

There are probably more Rio players in the storage rooms of the dealers than in the hands of customers. These guys make great classical stereo equipment, but even there, the design stinks. Home stereo components still look the same as in the 80s, they are even back to silver fronts. I wonder when the VU meters will return.

Aug 26, 05 - 10:56 am Comment from: Mike Buonarroti - Italy

Better yet...

With any luck, Microsoft will be the next to go.

Aug 26, 05 - 11:02 am Comment from: Don't get me wrong...

...I love my iPod, but I've learned from years in the business that some competition is good. It pushes innovation, drives down pricing, and acts as an overall benefit to consumers. Just because we happen to love one particular product (and for VERY good reason) doesn't mean that we should desire that all other products go away. I don't predict that it will happen, and I don't think we should really WANT it to.

That said, I understand why some of these products will disappear: poor user interface, lackluster integration with software (particularly for the techo-phobic and techno-ignorant), and an overall poor consumer experience. Yes, it will happen that some will go away, but let's hope that it's not at the price of total iPod domination. We should WANT Apple to have some healthy competition. We'll all benefit from that (unless we're stockholders, I suppose...).

Aug 26, 05 - 11:02 am Comment from: macnut222

Sadly Mike B, MS has too much money to be next. They'll lose a lot of their influence and power (in addition to what they've already lost), but they'll still be here to infect the industry.

Aug 26, 05 - 11:10 am Comment from: Sol

I guess the plan to compete with Apple by supporting Microsoft's format has not been the success they believed it would be. So much for their so-called iPod Mini killer.

Aug 26, 05 - 11:13 am Comment from: Jeff

First Snow White, now iRiver.
Tip: Do not bite the Apple

http://www.iriver.com/html/index.asp

Aug 26, 05 - 11:16 am Comment from: macnut222

Don't get me wrong, you're right. Competition is good (as we've witnessed from the OS situation we have today). That said, I have no sympathy for companies that go under because they lack a push to innovate their own products and only badmouth and hate on Apple because of their success with iPod (yes, I'm looking at you Creative (launching 'wars') and iRiver (pictures of people biting into Apples).

With this in mind, it is a shame that Rio was the company to go. Rio released the second MP3 player on the market - ever - and their products didn't look like iPod wannabe clones. Not to mention the fact that they didn't badmouth Apple every chance they got or do stupid things like launch 'wars'.

Aug 26, 05 - 11:16 am Comment from: MacJack

We shouldn't gloat too much - competition is good.

Still, an Apple monopoly is infinitely better than a Microsoft monopoly.

Aug 26, 05 - 11:23 am Comment from: homeboy

a moment of silence for the soon to be departed...
..


OK. Now turn the iPod back on. Keep on rocking.

Aug 26, 05 - 11:30 am Comment from: Paul Howland

Yeah! Great! Bring on the Apple monopoly so the iPod can become even more overpriced!

Aug 26, 05 - 11:32 am Comment from: Macs King

I have a Rio MP3 CD/am-fm player I got shortly before acquiring my first iPod. The Rio is a $179 piece of crap - ultra slow disc access and rotton (horrible) user interface. After two months of torture trying to use the Rio to play music in my van I bought the first of my three iPods. I would personally like to wish D&M holdings all the worst and I hope you lost plenty over this. Long live the King!

Aug 26, 05 - 11:33 am Comment from: EV1

My only regret is that Rio did make the best non-Apple mp3 players out there. I would much rather see Creative or iRiver bite the dust than Rio, but this story proves that Apple's dominance of the market is virtually total at this point. I'm sure B.G. is thrilled by today's news that another "plays for sure" vendor is gone...

Aug 26, 05 - 11:34 am Comment from: RC

"Bring on the Apple monopoly so the iPod can become even more overpriced!"

Seeing as how they're generally priced at or below their competition on a per GB basis, I truly fail to understand what in the hell you're talking about...

Aug 26, 05 - 11:38 am Comment from: Macs King

Overpriced? For just a little more than a normal USB keychain memory module you can get one that includes iTunes? Long live the cheap simple iPod Shuffle.

Aug 26, 05 - 11:41 am Comment from: Spark

Smart business move on their part. Being an also-ran in the low budget MP3 player market doesn't fit with success and excellent reputation they have with the Denon and McIntosh brands.

I also agree with the others that gloating is inappropriate (but only if overdone). Without the dark sea of bad to mediocre portable players out their, the iPod would have nothing to shine against. When iPod is the only player around, we will all go deaf from the sounds of complaints about it.

Aug 26, 05 - 11:41 am Comment from: eaxit

That's Karma for ya...

Aug 26, 05 - 11:46 am Comment from: Mac ed

Cry me a iRio...

Aug 26, 05 - 12:01 pm Comment from: little man

"The digital audio market is evolving in such a way that our competitive advantage will be to focus on creating premium home network products that are designed for compatibility with a variety of client devices and services," said Vic Pacor, president of D&M Holdings in the press release."

Now they can build ipod interoperability into their Denon receivers and partner with Apple instead of competing. That'll probably make them more money in the long run than selling the rios ever did (shouldn't be hard since they had to have LOST quite a bit on them).

Aug 26, 05 - 12:11 pm Comment from: macnut222

"Now they can build ipod interoperability into their Denon receivers and partner with Apple instead of competing. That'll probably make them more money in the long run than selling the rios ever did (shouldn't be hard since they had to have LOST quite a bit on them)."

Too late. They already have products on the market.

http://www.gizmodo.com/gadgets/home/denon-smart-life-ipodlovin-home-cinema-system-118119.php

http://www.t3.co.uk/news/entertainment/home_cinema_system/denons_made_for_ipod_home_cinema_system

Aug 26, 05 - 12:22 pm Comment from: WAHHH

im ashamed of all of you! think of the children!

Aug 26, 05 - 12:49 pm Comment from: Un

Thanks to (Un)fair-Play. Luckily we still do have CD's

Aug 26, 05 - 01:05 pm Comment from: RC

And "Plays For Sure" isn't proprietary at all either though right? wink

Aug 26, 05 - 01:20 pm Comment from: g

Looks like someone had them a nice big breakfast of CROW this morning.

Eat it, you slimy bastids.

Aug 26, 05 - 01:25 pm Comment from: little man

Thanks, macnut. Doesn't look like they have much support between product divisions, or that probably wouldn't exist. Not saying it's not a good business move, but in a small way they were competing with themselves.

Aug 26, 05 - 01:32 pm Comment from: Cloudwall

Howland, if you want a cheap music player maybe you should consider buying a Sony Walkman (tape player)

Aug 26, 05 - 02:01 pm Comment from: progeny

"...I've learned from years in the business that some competition is good..."

Agreed. Now if some competition would just arise, Apple would be forced to innovate at an even greater rate. Rio was no more Apple's competition than is Creative. These folks market cheap, inferior knock-offs... tossed-together circuits desperately and belatedly grasping for the scraps of a market that Apple created and currently owns.

Just a guess, but if competition does someday arise, it will likely come from Sony...

Aug 26, 05 - 02:01 pm Comment from: eurotrash

More room for Archos too.

Aug 26, 05 - 02:02 pm Comment from: Paul Howland

You fan boys are just sooooo easy to wind up. I love it.

Aug 26, 05 - 02:16 pm Comment from: On innovation...

Competition drives innovation. Fortunately for us, Apple has always seen itself as the company to beat and they will continue to do so.

Aug 26, 05 - 02:26 pm Comment from: simple1

as everybody said, competition is good don't let us forget the dark days also. I know the iPod is not like the Machintosh don't remind me as to why? but instead of gloating so much let's just hope we continue to remind apple why we need them to continue to innovate so that all pretenders are gone and only the contenders remain.

PS: I hope this wasn't the company that declared war on the iPod because if it was then I feel not an ounce of surrow for them.

Aug 26, 05 - 03:08 pm Comment from: MacDude

Well it didn't help Rio that you had to slam their devices on a desk to get them to work.

http://features.slashdot.org/article.pl?sid=04/10/09/1813228

Aug 26, 05 - 03:08 pm Comment from: macnut222

No. Creative was the one that declared war. Rio was the company that did their own thing and generally didn't bother anyone.

I wish it was Creative.

Aug 26, 05 - 03:14 pm Comment from: macnut222

"Well it didn't help Rio that you had to slam their devices on a desk to get them to work."

Reminds me of the Apple III. http://en.wikipedia.org/wiki/Apple_III

Aug 26, 05 - 04:51 pm Comment from: Rory

Competition is good, but the products that die aren't always the ones which are inferior. D&M just didn't have the interest in marketing a product with such thin margins (iPod's are even thinner).

The Karma is better in audio components and firmware design, plays Ogg and FLAC, has Crossfade and on-the-fly playlists, much better battery life... The competing iPod, at the time, didn't even have a 5-band EQ. Still doesn't, in fact. But, it has games. Woo Hoo! That's showing the audiophiles!

The Carbon was also clearly better than the iPod mini.

This story is about deep pockets and successful marketing. It's about people who are more interested in buying devices for conspicuous consumption, rather than buying a high-quality audio device.

Now that Rio is gone, iPod still isn't the best high-end DAP on the market. It's an iRiver product.

R.

Aug 26, 05 - 04:57 pm Comment from: Rory

And let's not forget the real Legacy of Rio. It's the Cambridge engineering team which now works for Sigmatel.

Next year, when you all jump up and down because your Apple DAPs now have crossfade and other new features, remember: that's Rio code. smile

Aug 26, 05 - 05:23 pm Comment from: Less is More

The company’s decision to exit the Rio business followed a determination that they couldn't make beans out of it.

Aug 26, 05 - 05:31 pm Comment from: g

Rory,

While we can sit and argue over the audio quality all day long, we all know that for the average consumer, audio is, for the most part, just audio. As long as you can't tell that it is a lower bit-rate, who cares? I would have a hard time distinguishing 128 AAC than a regular CD. Why? I don't know, and I don't care. But it doesn't bother me, and I assume it doesn't bother most people because iPods fly off the shelf, regardless of the supposedly inferior quality. Why do most musicians own iPods? Why doesn't Trent Reznor own a Rio or iRiver?

Apple exists to target a general audience of people who aren't anal about audio quality, which I fortunately find myself a part of. I think these days a lot of people place more importance on the quality of the stereo equipment, rather than the quality of the music itself. I'm sure you can find evidence of this on every street in America with music blaring out of $1000 speakers being played by someone who couldn't tell you the first thing about the science behind music, much less carry a tune.

Aug 27, 05 - 08:32 am Comment from: Brad T

Mac Ed:
"Cry me a Rio"

hahhahaha.

LOL. Excellent, loved it!!

I've live in Sydney, Australia but have been studying Spanish for 18 months, from an Argentinian expatriate from Buenos Aires, which of course is on the Rio de Plata (River of Silver), and I really appreciated that one... smile

Sorry...do continue...

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