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Diamond CEO charts company's MP3 future

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Diamond Multimedia CEO Bill Schroeder yesterday told attendees of the NationsBanc Montgomery Securities Technology Week conference in San Francisco that the company has sold over 100,000 Rio PMP300s since the MP3 player's launch last November. The thrust of Schroeder's speech was to stress Diamond's move to expand out of its traditional role catering for the graphics and sound add-on markets. As reported in The Register, Diamond embarked on just such a strategy last November in attempt to cut costs and improve the company's financial position (see Diamond to axe up to 180 jobs). Then, Schroeder said Diamond would soon begin to focus on high-margin, proprietary products for the 3D graphics, audio and multimedia markets, and items like the Rio for new markets. Low-margin cards based on other companies' technologies would begin to disappear from Diamond's product line. The subsequent sales of the Rio suggest that Schroeder's plan may be working. It's most recent component was the launch of RioPort, an Internet portal aimed at music fans and Rio owners. "We want to extend out of the hardware-only model," said Schroeder at the conference yesterday. He then went on to compare Diamond's new approach to the razor market. Rio, he said, represents the razor, RioPort the blades -- razor manufacturers make far more money on the blades than the razors, he added. Schroeder described Rio and RioPort as "breakout" products which provide Diamond with a "developing revenue stream" -- unlike the company's more traditional products, he admitted. ®

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