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TechNewsWorld.com

iRiver President Jonathan Sasse on Creating the iPod Killer

By Kirk L. Kroeker
Apr 30, 2004 6:00 AM PT

Contrary to popular misconception, Creative Labs was the first company on the market with a hard-drive-based digital music player, the original Nomad Jukebox, which came out initially built around a 6 GB 3.5" hard disk. The Jukebox looked like a portable CD player, which could account for its initial popularity, but the form factor that would later prove to be most popular was the player built in the shape of a notebook computer's smaller hard disk and then later the form factor that Apple and iRiver built their respective players around: the 1.8" drive, slightly smaller than a standard 2.5" laptop drive.

iRiver President Jonathan Sasse on Creating the iPod Killer

When Apple's iPod came out -- the first hard-drive-based player on the market to come in a form factor not much bigger than the hard drive itself -- and quickly dominated the media-player space, Creative Labs, iRiver, Diamond Rio and several other consumer electronics vendors responded with their own versions, like the iRiver iHP-120, a media player that quickly garnered several awards around the industry.

Clearly, amid much competition by other industry players, iRiver has been keeping pace, neck and neck, with iPod innovations, even offering a wider range of technologies and players than Apple. In addition to the company's set of hard-disk-based media players designed to go head to head with the iPod and other players at the high end, iRiver has a full arsenal of smaller media players based on the flash media storage format.

According to most analyst estimates, the iPod has the largest market share among all portable digital media players. But if any company can take on Apple in the media-player space, it is iRiver, a company that has been setting the high-mark standard for media-format compatibility. The company is perhaps the first major media-player manufacturer to offer players that are compatible with MP3, WMA, ASF, WAV and OGG music file formats.

To hear about the future of media players, TechNewsWorld turned to iRiver president Jonathan Sasse for an exclusive interview. Sasse talked about new storage formats, the future of personal media-player technology, and how the company is planning to take on the iPod to dominate the media-player space.

TechNewsWorld: First, can you tell us a little about your background and what you do at iRiver these days?

Jonathan Sasse:: I started my work in the digital audio space very early on with Diamond Multimedia as the Rio branded MP3 player was getting ready to launch, the first major MP3 device in the U.S. market. During my time with Diamond Multimedia, Rio and SONIC blue, I was involved in all aspects of new product development, new technology research and market development for the compressed audio category, launching dozens of new products. In 2002, I joined forces with iRiver to help brand and launch the iRiver brand into the U.S. market. Today, as President and CEO of iRiver America, I oversee the sales, marketing, product planning and operations for North America.

TNW: Your company, unlike Apple, has not focused on a direct synergy with an online music store. Instead, iRiver has favored background partnerships, media player integrations and broad format compatibility. Are you planning an integration effort or some partnership that will pair your media players directly with an online source for music?

Sasse: We are doing our best to remain as agnostic as possible in this arena. Our customers are looking for flexibility to choose the options that best suit their needs. By favoring the secure Windows Media format, it opens up the opportunity for competition in services, ultimately providing our customers with multiple libraries, service options, and payment structures to choose from. We aim to produce the best devices possible, in multiple categories, supporting multiple formats and services so our customers can always choose what is best for them.

TNW: How has the onset of digital rights management technology affected your hardware strategies?

Sasse: Digital Rights Management technology has been around for some time; it is the abundance of services, content and the support of key labels driving consumer demand at this point that is shaping the hardware industry. Certainly with the marketing efforts of the major online services, along with similar activity from the hardware side, consumer awareness is up considerably and the need to supply customers with the products and services they desire is a top priority.

TNW: Given that iRiver has moved in recent years to the cutting edge of sound technologies and consumer electronics, do you foresee a time when you'll branch out into other areas, like mobile phones or PDAs?

Sasse: As products and technology converge, there are always opportunities to integrate entertainment into the devices that we use every day. Adding functionality to products such as mobile phones or PDAs too early is little more than a novelty. Our focus now, and in the immediate future, is to provide consumers with outstanding portable entertainment devices. As it makes sense to do so, other peripheral products could benefit from our entertainment advances while at the same time it is not unreasonable to envision key technology from the business applications making their way into a future product line.

TNW: Many companies, like Gateway and Microsoft, have begun to approach the living room with consumer electronics designed to be more about entertainment than office work. Is iRiver planning any kind of non-PC technology that can be used in an entertainment center?

Sasse: Devices that we are launching as early as this year are taking a step forward in this direction. As the Media Center systems make their way into the living room, and out of the office, there are still devices that will be needed to keep that content mobile. The iRiver Portable Media Center product launching in the second half of this year will begin that process. Home products of this kind are still very much in their infancy, but portable integration with these solutions is still a very important value add.

TNW: What's the most exciting technology happening in the development lab at iRiver right now?

Sasse: Keeping in line with the previous comment about the Portable Media Center, I believe that bringing a complete multimedia experience to a portable device is a very compelling opportunity for consumers. As we will launch several variations of a portable multimedia player this year, our customers will now be able to take all of their music with them as they have previously, but in addition they will be able to take photos and videos with them as well. Whether it is a portable TiVo-like experience, a digital photo collection or a supercharged audio experience, these devices will change the face of portable entertainment completely.

TNW: Do you see the Apple iPod as your main competition at this point, or are there other players you admire more on the market?

Sasse: At this point, there are very few companies that have a product line that rivals iRiver. Without question, Apple has done a great job marketing their solution and the industry as a whole has benefited from that, but our strategy is entirely different. We believe there are many different consumer needs that need to be met with the right product; as such, our product line has something for everyone, whereas other companies may take the approach of "one product for everyone."

TNW: How do you plan to take the iPod crown away from Apple?

Sasse: Apple can keep the "iPod crown." The "portable entertainment crown" is still up for grabs, however, and we have our sights set squarely upon it.

TNW: What about other media formats, like Ogg Vorbis, which you've recently accommodated in your latest firmware? Is there room for adoption of other new formats?

Sasse: In maintaining the flexibility of our product line, we are constantly looking at different formats, audio and video. If consumer demand is there, and a new format is robust, it is worth a closer look. MP3 was the standard; WMA enhanced that experience by offering a secure element in a quality format, while Ogg Vorbis removed the licensing restrictions for consumers and maintaining a high-fidelity media format. As secure content grows, new formats may give way to existing formats evolving accordingly.

TNW: Creative Labs has a proprietary sound-enhancing format, called EAX, that has been widely praised around the industry. Does iRiver have a comparable sound-enhancing technology that the company is working on?

Sasse: Sound enhancements for portable devices are quite abundant from many credible audio specialists in our industry. We have adopted several of these, including sound enhancements from SRS, which enrich the listening experience for many customers.

TNW: With new storage formats on the horizon that will likely outmode flash-based technologies, can you hint about what storage media the company will focus on in the future?

Sasse: I will say that drives will continue to get smaller and more robust. As the durability and capacity of small drive technology increases, this will be a good solution moving forward for many products. The advantage that flash memory still has over any other storage format is the lack of internal moving components. Flash players have certainly shifted a bit -- initially being the only solution for compressed audio, to becoming the perfect solution for athletic activities -- but flash is very difficult to beat in this regard. Small drive technology has not yet reached the point where it can replace flash, but I do see a time in the future where the gap will be much smaller, as will the drives.

TNW: What do you think media players will look like in 10 years?

Sasse: In 10 years I see two types of highly evolved entertainment devices. There will be a strong play for very small audio devices, perhaps which fit nicely in your ear, without the need for wires or cables, and possibly doubling as your cell phone earpiece when you aren't on the treadmill. Portable video will make gains with the display, either with visual glasses for personal use, or advanced display technologies enabling several people to enjoy a single portable device. I do believe the business and entertainment will remain mostly separated on specialized devices for each respective function. With cell phones picking up the PDA, Internet and commerce functions, and portable entertainment devices evolving the video, audio, and gaming experience.

TNW: How about 20 years?

Sasse: It will be a lot of fun.

TNW: Given that iRiver manufactures many products that are widely used as storage media for pirated music -- and of course legitimate music also -- does iRiver have a corporate stance or policy toward the RIAA and other industry groups that are suing consumers for sharing files online?

Sasse: As I have mentioned a few times, we design products to suit our customer's needs as best as we can. By doing this, our product grows and evolves with our customer's desired use model. Other industry groups are in a position to grow in a similar way, offering their products and services in the way that paying customers wish to use them. Customers aren't obtaining illegal content because they are criminals; it is because the existing model did not suit their needs. People are quite used to paying a fair price for products they enjoy, which is a clear indication that the product isn't meeting the customer's needs.

TNW: Is there anything else you would like to add?

Sasse: I appreciate the opportunity to discuss this very exciting industry with you, and iRiver's role in it. This year will be fun for consumers as the industry continues to mature. Services and devices will continue to evolve, all in an effort to entertain. It will be a great ride.


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