MusicGremlin Aims At iPod Market

By Doug Olenick -- TWICE, 4/18/2005

New York — The Apple iPod may be the hottest consumer electronics device on the market, but the executives at MusicGremlin are undaunted at the task of taking it on a new wireless technology with their new music service.

MusicGremlin's idea is to add a wireless music-download capability to a hard drive-based portable music player. A prototype device, shown by Intel in March, indicates that the final models will be somewhat larger then an iPod, support a variety of hard-drive sizes along with flash memory, contain a small display, and have 802.11b Wi-Fi networking. The devices generally operate like any other portable player, allowing users to store songs on its hard drive. However, the consumer can also wirelessly access the MusicGremlin music store to buy additional music, said Jonathon Axlerod, co-founder and co-president of MusicGremlin.

“We want to take the iPod head-on. [The service] is a good differentiator. Right now there are just lots of 'me too' products,” he said.

Another aspect to the service is an online community of MusicGremlin device owners. Using a rudimentary keypad located on the device, consumers can chat with each other and even view other people's playlists. The technology can also support Internet radio, but the company does yet not see a need to activate that feature.

Axelrod said his company will supply the back-end technology and service, but will not build the hardware. This job will be handled by OEMs.

The first OEM units are expected out for the 2005 holiday season with a price in the $299 range. Music purchase prices will be 99 cents for a single and $14.99 for a monthly download subscription. Axelrod did not announce any OEM deals.

MusicGremlin's wireless download ability will make it a natural for college students, Axelrod said, since most college campuses are Wi-Fi-enabled and the technology should be attractive to those consumers using the growing number of public hotspots.

MusicGremlin will handle all the back-office support for any OEM devices including billing and arranging for music licenses with the publishers. The company has deals with most of the major music publishers

The technology is not limited to delivering just music nor to portable music players, Axelrod said, and while the portable market holds the most potential, he could see it being used in car audio. In addition, MusicGremlin technology supports video, but he does not see that being implemented until the digital rights management issues with that content are solved.