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Two Firms in Deal for Rhapsody Player

RealNetworks and SanDisk's music device won't use Microsoft's digital rights technology.

September 18, 2006|From the Associated Press

RealNetworks Inc. is teaming with SanDisk Corp. to release a portable music player that more closely links with RealNetworks' Rhapsody online music service, the companies said.

The deal, expected to be announced today, is the latest attempt to take on Apple Computer Inc.'s iPod and iTunes stronghold. Analysts see it as a way for SanDisk and RealNetworks to join forces against a new common foe: Microsoft Corp., which recently announced plans to release its Zune portable music player and service.

Redmond, Wash.-based Microsoft has been providing the technology that enables services such as Rhapsody to transfer songs to portable music players without compromising the digital rights of that content. But many believe that Microsoft's plans to release the Zune service and a player made by Toshiba Corp. could make the software giant a significant competitor.

"This is kind of a way for both Rhapsody and SanDisk to say, 'Well, if you're going to compete with [us], guess what, we're going to compete with you,' " said analyst Phil Leigh at Inside Digital Media.

Katy Gentes, a product manager for Microsoft's Zune effort, said Friday that the company remained committed to the Windows Media platform it provides to partners.

Under the deal, Seattle-based RealNetworks and SanDisk of Milpitas, Calif., plan to release the Sansa Rhapsody, a portable music player based on SanDisk's e200. The gadget should be available in time for the holidays, but the companies won't say how much it will cost.

The player will come pre-loaded with hundreds of songs from artists such as the Dixie Chicks and Jessica Simpson as part of a free trial of RealNetworks' Rhapsody to Go subscription service. Anyone who buys or already has the music service will then be able to use the gadget to listen to nearly all of the songs available through the core Rhapsody service.

The Rhapsody Unlimited online service charges users a flat fee of $9.99 a month to essentially rent an unlimited number of songs as long as they subscribe to the service. Users who purchased the Rhapsody to Go service, at $14.99 per month, had previously been able to transfer their Rhapsody songs from their computers to a portable music player. But the process required using Microsoft's technology for managing digital rights, a process RealNetworks said was clunky and had glitches.

"The fact that one company was making the player, one company was making the software and a third company was making the service meant it was not seamless," said Dan Sheeran, senior vice president of music for RealNetworks.

Sansa Rhapsody will use RealNetworks' own digital rights technology, which RealNetworks says will work more smoothly and enable the company to offer more bells and whistles. The gadget's release also will coincide with an update of the Rhapsody service.

Eric Bone, a SanDisk marketing executive, said the goal of the partnership was to help smooth out the bumps that came with pairing the Rhapsody service and Microsoft technology.

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