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HipZip Leads Iomega Into Promised Land Of Consumer Electronics

NEW YORK — Iomega took its first step toward reinventing itself as a consumer electronics company with the release of the HipZip digital audio player, but the company has no plans to abandon its roots as a removable storage supplier.

The HipZip is based on a 40MB PocketZip disk, a re-branded Clik disk, and is being positioned as an economical alternative to the flash memory-based players that dominate the market. The player carries a $299 suggested retail price, and each PocketZip disk is expected to cost about $10.

The player uses Microsoft’s Windows Media Player 7 as the default software, which can compress the data twice so a 40MB disk can hold 80MB, or 80 minutes, of music. Like a standard Zip, the disks are rewritable.

Iomega will follow up the HipZip with a series of products, both new and additions to the HipZip family, which may include adding wireless Internet connectivity and video capabilities. The company has firm plans to add an AM/FM receiver to the HipZip in the next year, according to an Iomega spokesman.

All of these functions can be controlled with the bundled Media Player 7 software.

While Iomega wants to be viewed by consumers as more than a storage company, it also plans to make a few moves before the end of the year in its core storage product categories.

A company spokesman said a new CD-RW drive featuring a cooler, consumer-oriented design is forthcoming.

In addition, a deal will be struck with a content provider to start selling Zip disks with prerecorded content. Prerecorded music and audio will also be sold through deals Iomega has struck with EMI records and I-Jam Multimedia.

Iomega’s game plan for the HipZip is similar to DataPlay’s strategy (see story above), with both companies hoping to OEM their hardware technology and sell prerecorded music on the media.