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Compaq tunes into MP3

2 July 1999

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It was five years ago today... Back in 1999, Compaq supremo Michael Capellas said that "The Internet will demand different types of devices to service different purposes". He was talking about cool kit like digital music players, and he was right:

Compaq tunes into MP3

By Tony Smith
Published Friday 2nd June 2000 16:09 GMT

Compaq will hop onto the MP3 bandwagon later this year courtesy of CEO Michael "Groovin'" Capellas's pet project: the Big Q's consumer division.

"We're coming out with MP3 players. The Internet will [demand] different types of devices to service different purposes," he told a gathering at Santa Clara, California's Churchill Club, according to CNET.

That means kit like digital music players and Net access set-tops - both products Compaq's consumer division has been working on since its formation in July 1999, not long after Capellas joined the company.

"It is time to take these beige boxes and transform them into interesting access devices," he added.

It's also time to take a stand against the controversial MP3 sharing software, Napster, said Capellas: "It will ultimately be destructive if we don't take a stand." The Big Q Capo's concern here is the ease with which Napster can be used to distribute unauthorised copies of mus#ic and other intellectual property, as demonstrated by the open source Napster knock-off Gnutella, which he didn't appear to mention. Perhaps he hasn't heard of it.

Capellas didn't go into much detail about either the MP3 player or Compaq's set-top box, so it will be interesting to see when - and if - the company does indeed make a foray into the consumer electronics space. Comdex launch in time for Christmas, anyone?

After the speech, Churchill Club members boogied away the night in single-minded pursuit of the groove.


As history records, HP swallowed Compaq in 2002 after much legal wrangling, but retained the brand name.

Later that year - having pocketed a cool $14.4m from the deal - Capellas jumped ship to join, er, Worldcom. The bankrupt giant was able to rustle up enough cash to promise Capellas a $2m sign-up fee plus first-year salary of $3m - something which raised a few eyebrows at the time.

Still, men of vision demand a salary to match their farsightedness. In March, we reported that "Apple posts Compaq iTunes as HP music store goes live". This was followed by the news that HP will imminently punt an HP-branded iPod.

Rival Dell, meanwhile, is offering a $100 trade-in to customers who ditch their iPod in favour of the company's Digital Jukebox MP3 players. The age of the digital music player is truly upon us. As for the "interesting" set-top box, well, it's early days.... ®

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