March 8, 2005 12:02 PM PST

Virgin Electronics shutting doors

Virgin Electronics is closing it doors less than a year after refocusing on digital music devices.

Company representatives confirmed the shuttering Tuesday. The Virgin Group-funded company moved from New York to Silicon Valley in July of last year to draw more talent to its creative digital products.

At the time, Virgin Electronics CEO Greg Woock commented that the digital audio market was still wide open.

"The digital music market is in its infancy, and there's plenty of room for innovation--especially from a strong, branded alternative," Woock said in a statement. Virgin Electronics set out to distinguish itself through particular attention to the consumer experience and to innovation.

However, the field became quickly crowded. The runaway success of Apple Computer's iPod line of music players brought more companies to the market, and many big names such as Dell, Sony Electronics and Creative Labs are squeezing out smaller rivals.

"Distribution is the key to the market now, and there's iPod and everyone else," said Stephen Baker, an analyst with retail tracker NPD Techworld. "Without a unique story, it's hard for any player to get shelf space. They had a couple of good deals--one with Target--but they were never able to make a dent in the market."

Virgin's closing is effective immediately, with all products discontinued. The company said it will honor warranties on previously purchased devices.

Gadget blog Engadget first reported on Virgin's closure.

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...the fact that all of their products looked absolutely terrible?? Amazing that none of their new talent in siloncon valley was able to make the connect between sales and aesthetics...
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