Rio has outlined its plan of action to attack Apple's iPod dominance.

Rio president Hugh Cooney told Business Week that his company intends to "design the right product at the right value and then use any kind of buzz we can take advantage of."

According to market researchers at NPD Group, the iPod accounts for 54.7 per cent of total digital-music-player units sold, while Rio accounts for just 8.9 per cent.

Vice-president for marketing Dan Torres believes that Rio is already taking away market share from Apple. He said: "When we look at the entire space, Apple makes only a hard-disk player. We have a new hard-disk offering in the Carbon 5 gigabyte. It's a little hard for us to figure out what share we're taking from them, but we're competing with them directly. So far we think we're doing quite well, and we'll be taking share away from iPod mini."

Flash in the pan

Discussing what will happen if Apple brings out a flash-memory-based player Torres said: "It will be interesting to see how Apple changes its position in coming into that market. Will they go after sports, which is one of our targets? It will be an interesting addition to the market. Apple will call attention to the importance of flash. Just a year ago they had said flash is passé."

The MP3 market war is being fought over the positioning of the players, according to Torres. He explained: "I think we see people starting to differentiate on a variety of characteristics, whether it's about branding, youthful market, or price."