Rio Exits MP3 Player Business

Facing increasing market pressure, D&M Holdings, the company that owns the Rio digital music player brand, announced that it would be exiting the market at the end of September.

D&M will continue to hold the rights to the Rio brand name and could re-enter the market as it still has access to the MP3 technology it sold in July to SigmaTel.

As with many companies attempting to compete with Apple's ubiquitous iPod, Rio found it difficult to stay competitive without spending a good deal of capital. Creative has found similar roadblocks; earlier this month it reported a much wider loss than expected due to pressures from Apple.

The announcement follows only a few months after Rio certified its Carbon and Ce2100 devices for Microsoft's PlaysForSure technology. The company will instead focus on what it calls its core businesses - premium audio and video 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.

The company will continue to support all Rio players through its warranty, service repair, and customer service channels.

D&M also said on Friday in conjunction with the Rio announcement that its purchase of AV company Boston Acoustics was imminent and "right in line with our premium-focused strategy."