More blood on Apple iPod’s Click Wheel: Rio is dead

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.
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

44 Comments

  1. 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.

  2. …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…).

  3. 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’.

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