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Dell left the DAP market in 2003 after poor sales

Apple is by far the 700-pound gorilla in the digital audio player (DAP) market. Apple’s lead in the field is staggering, according to analyst firm NPD Group Apple holds a massive 71% of the U.S. MP3 player market.

The second place firm in the rankings is SanDisk with a mere 11% of the market. Microsoft and its Zune player hold only 4% of the MP3 player market. Sony and Creative bring up the rear with a paltry 2% of the market for MP3 players each.

Sales of Microsoft’s Zune players were so low for GameStop that itstopped selling Zune players altogether. Dell was once in the DAP market and pulled out in 2003 after poor sales left it with a tiny fraction of the MP3 player market.

Despite Dell’s inability to compete in 2003, it has announced itmay enter the DAP market again. The Wall Street Journal reports that this time Dell says it won’t try to compete with the iPod head on. Dell says this time — if it enters the DAP market — it won’t simply sell hardware as it did in its failed 2003 attempt. Rather, this time Dell will sell a music player that will work closely with Dell software for a range of portable devices — including PCs and cell phones — allowing users of the Dell device to download and organize music from multiple sources and share it with multiple devices.

Dell says that it is currently testing a DAP with volunteers and that the player in its current form would hit the market for under $100. Details on the new Dell player are scant right now — the name of the device isn’t even known. What is known is that the Dell DAP would feature a WiFi internet connection allowing for mobile music downloading when a signal is available.

Dell says that its software would also allow users to download movies and watch them on a PC. Dell won’t say exactly how it intends to generate profits from the DAP and software according to The Wall Street Journal. Dell could try to make money off the actual hardware sale or it could try to generate profits form a subscription-based music service or sales of movies and music.

dailytech.com