Dell (NASDAQ: DELL) may join the parade of companies that have taken a shot at taking multimedia player market share away from the Apple (NASDAQ: AAPL) iPod. The PC company may have a better chance than most.
According to The Wall Street Journal, "Launching the player -- along with an online download service and related software -- would be part of a strategy that Dell Chief Executive Michael Dell hopes will move the company into a broader range of consumer markets than it has served before."
The conventional argument is that Apple has over 150 million iPods sold and that its iTunes franchise may be the largest music download service in the world. By some measures, iTunes has 70% of the online digital music market.
Dell has one significant advantage over past challengers: it is already one of the largest online consumer electronics marketers in the world due to its prowess in the PC industry. In terms of revenue, Dell is over twice Apple's size and has an unusually strong balance sheet. It can afford to make a long-term push into digital music.
Dell will have to create its own music store, but based on the number of participants in the field, that should not be a high hurdle. Dell may also be able to use the huge online sites of some of its retail partners like Wal-Mart (NYSE: WMT) to market its new products.
Dell has long odds for picking up business from Apple, but not nearly as long as some other firms that have tried to move into the industry.
Douglas A. McIntyre is an editor at 247wallst.com.