January 5, 2001 5:00 PM PST

Compaq to switch on jukebox for MP3s, CDs

What do Barry Manilow, Metallica and No Doubt have in common?

If Compaq Computer has its way, the iPaq Music Center.

At the Consumer Electronics Show, which opens Saturday in Las Vegas, Compaq will show off a stereo jukebox for storing and playing digital music files such as MP3s. Although Compaq isn't the first company to jump on the digital music craze--Dell Computer and Gateway released jukeboxes earlier this year--the Music Center improvises on the theme.

In some respects, the product acts more like a piece of stereo equipment than like a PC peripheral. For example, the Music Center hooks up to a television for viewing an interactive song database. It also comes with a CD player and connections for buying CDs online.

Although no one is quite sure how well jukeboxes will fare in the marketplace, the concept is attracting interest so far.

"The jukebox that Creative Labs released has sold surprisingly well considering the $500 price tag," PC Data analyst Stephen Baker said Friday. "It seems like it's a category people are going to understand. So from that perspective, it's an interesting thing for Compaq to be in."

Compaq's jukebox is fairly large, measuring about the same size as standard 17-inch stereo equipment. Compaq estimates the jukebox can hold about 400 CDs or 5,000 songs saved in MP3 format on a 20GB hard drive.

Other features include a 56-kbps modem for listening to Internet radio stations and HomePNA networking for connecting to a PC.

The company came out with an iPaq portable digital-music player earlier this year.

Rob Masterson, a Compaq marketing manager, described the iPaq Music Center as a "very intelligent CD changer." Besides storing the songs, the jukebox automatically generates a database of information on the CDs including the artist, the album cover and the genre.

Many portable and home digital-music players require a PC to download, transfer or store songs. Compaq chose to create a standalone device using an interactive menu displayed on a television. Songs can go straight from the CD player to the unit's hard drive.

Consumers use the menu to organize their songs in a variety of ways, including an unlimited number of playlists or genres.

"It's in the living room; it's on the TV; it's going to be structured. One or two clicks, and that's all you're going to need to do," Masterson said.

The first-generation product, which Compaq Read more breaking CES news here will start selling in the first half of the year, will pack a standard CD player. Because of copyright concerns, Compaq chose not to offer a CD-rewritable drive at this time, Masterson said. Still, the player can read CD-RW discs.

When connected to the Net, the iPaq device can play Internet radio stations also using the TV menu screen.

Compaq hopes to generate additional revenue through CD sales. When connected to the Internet, the jukebox offers CDs that can be purchased online. The Houston-based PC maker gets some percentage from the sale, but Masterson would not be more specific.

Compaq would not offer details on price, although the player is expected to sell for the same as similar stereo or digital jukeboxes, which typically go for $400 to $500.

In addition to the jukebox, Compaq will be showing off a music stereo component similar to those from Dell and Gateway. That device, tentatively called the iPaq Connected Music Player, requires a connection to a PC or to the iPaq Music Center. Masterson said it will come out in the first half of 2001, but after the release of the iPaq jukebox.

Technology Business Research analyst Lindy Lesperance praised Compaq's approach with the jukebox.

"Overall, their strategy is becoming less PC-centric," she said. "As a PC vendor, they're becoming well positioned in terms of the product line expanding to other areas such as appliances, handhelds and music players."

Baker agreed, noting the slowing holiday season for PCs as consumers flocked to buy gadgets such as digital-music players and digital cameras.

"The requirement of the market is that you can't have a small selection of consumer electronics products," Baker said. "It's in Compaq's interest to maintain its position and profitability by bringing out new products where it can leverage its brand name."

 

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