Fri, Dec 23, 2005 - Page 10 News List

Kuro tests market with MP3 player

CONSUMER SEGMENT The company hopes that the pairing of its music Web site with the player will help it to gain a foothold in the consumer electronics market

By Jason Tan  /  STAFF REPORTER

With the introduction of its own-brand MP3 player, kuro.com.tw (飛行網) aims to extend its reach into the consumer electronics product market, company executives said yesterday.

"We are testing the water to gauge product acceptance, hopefully to bank on our core strength in music to introduce more consumer electronics products next year," Jess Wu (吳政達), the firm's international business development vice president, told reporters at the product launch yesterday.

Kuro will introduce more offerings by the end of the first quarter next year, which might include mobile phones.

The company is the nation's largest peer-to-peer file-sharing operator. Three of its executives were convicted by a local court of copyright infringement earlier this year.

"We will collaborate with more hardware vendors in the future to facilitate our move to integrate software and hardware for consumers," Wu said.

He added that Kuro is unfazed by the fierce competition in the MP3-player market, which has already forced out a handful of vendors.

According to reports last week, BenQ Corp (明基), Taiwan's biggest mobile handset maker, will not dedicate more resources to its MP3-player product line and will allow it to gradually fade out of the market.

"Kuro will stand a chance in the market as our MP3 player has the support of the music-swapping portal, a business model similar to Apple Computer Inc's iPod series and the iTunes music store," he said.

Kuro's MP3 player, which was contract-manufactured by Lite-On Technology Corp (光寶科技) and designed by DEM Inc (橙果), comes with 512MB of internal storage, with an expandable memory-card slot.

Sold for NT$3,888 (US$117), the music player will be bundled with a free one-year subscription to kuro.com.tw.

The portal will be the main selling channel, along with PC Home Online (網路家庭).

Kuro hopes to grab a 3 percent to 5 percent share of the MP3-player market next year. The domestic market is estimated at about 1 million units of digital music players.

In September, the Taipei District Court found the file-sharing operator guilty of infringing intellectual property rights.

Its chairman, CEO and president received jail terms of up to three years and fines of NT$3 million (US$90,200) each. One of Kuro's members was sentenced to four months in jail, or a substitute fine of NT$300 per day, with probation of three years.

Kuro is now talking to major record companies and hopes to negotiate a settlement in the case, Wu said.

He declined to give a timeframe for a potential settlement or the compensation to be offered.

“The verdict did affect us in terms of losing some members, but we have

been seeing some subscribers come back recently,” he said, adding that the

current membership now amounts to around 400,000 users.

Kuro's membership reportedly stood at 500,000 before the verdict.

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