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Philips, Nike Ink Licensing Deal For Audio Line

Philips will take over OEM manufacturing of Nike-branded portable audio devices from SONICblue under an agreement in which co-branded Philips/Nike products will be available beginning in September.

Seven portable audio products will be available in 2002, including two flash-memory MP3 portables with 64MB and 128MB of memory at a suggested $129 and $199, respectively. The products also include two MP3-CD portables at a suggested $149 and $179, the latter for a portable that plays only 3-inch CDs.

The alliance, however, isn’t limited to audio. Future products will include apparel and equipment that “combine communications, connectivity and information to motivate athletic activity,” the companies said.

The products will be available through CE retailers and Niketown stores worldwide. Under the agreement, Philips is the lead contact for retailers, but Philips “is working very closely with Nike on all aspects of the alliance,” a Philips spokeswoman said. Retail channels will include CE retailers and perhaps athletic-equipment stores. “We are working with Nike to determine all of the channels,” she added.

Under Nike’s previous agreement with SONICblue, Nike marketed portable audio to CE and athletic retailers, and SONICblue sold the products on its Web site. SONICblue said it will continue to sell its Nike products on its Web site for the rest of the year.

Samsung was in competition with Philips to get the Nike deal, and late last year an optimistic Samsung marketer said an agreement would soon be announced.

Nike entered the CE market about a year and a half ago with the SONICblue alliance. Nike, which started as a running-shoe maker, has diversified into watches, baseball gloves, backpacks, eyewear and golf clubs. The Philips line and future products are designed “to enhance the overall athletic experience,” a Nike spokeswoman said. “They deliver a high-quality audio experience that is inspiring and motivating for physical activity,” Nike also said.