Audiophiles Scoff, but Rio MP3 Players Proliferate

MP3 may be under constant attack by audiophiles, and by music-industry attorneys in the courts, but the format shows no indication of disappearing. Santa Clara, CA–based S3, maker of the Rio portable audio player, has reason to believe that MP3 has plenty of growth potential. The company is going after licensees for the Rio to make knockoffs, and has plans to produce Rio-type players for home and car audio this summer.

S3 will soon produce a Rio Receiver, a wireless device capable of accessing MP3 files stored on a user's hard drive anywhere in the home. The Rio Jukebox will be a removable hard drive that can be inserted into a car player. Music fans will be able to load MP3 files onto the hard drive and then play them in the car, very much the way they do now by swapping discs in the magazines of CD changers.

Despite disdain for it among audiophiles, the MP3 audio format's popularity helped give S3 a big boost in business over the past year. The company enjoyed a 69% increase in unit shipments in the first quarter of 2000 compared with the fourth quarter of 1999. S3 has reinvented itself as an "Internet appliance company," and recently sold its chip-making business to Taiwan's Via Technologies, Inc. The company has seen its revenue rise by a factor of four compared to the same period a year ago, according to reports published in the electronics industry press.

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