Clearly, for new-generation MP3 players, "the new frontier is the home," said Michael Reed, vice president of marketing at S3 Inc.'s Rio Division.

Hard-disk-based jukeboxes and streaming-audio players are expected over the next few months from Compaq Computer Corp. (Houston), Creative Labs Inc. (Milpitas, Calif.) and S3 (Santa Clara, Calif.), joining early entries sold over the Web from small players like Remote Solutions and Request Multimedia. That's well in advance of the Secure Digital Music Initiative's definition of an encryption and copy protection standard for digital audio.

As the spec is being hammered out, big OEMs are itching to extend the market for portable players, which is expected to grow to as many as 4 million units shipped this year, according to market researcher Forward Concepts Inc. (Tempe, Ariz.). System OEMs are far from agreement on whether to support the Secure Digital Music Initiative (SDMI) specifications, and which codecs and protection schemes to employ. Of the three jukeboxes poised for debut, only Compaq's is likely to be SDMI-compliant.

Some OEMs are finding ways around the unresolved issues by developing their own copy protection mechanisms and pre-loading the jukebox players with hundreds of song titles, or building streaming-audio devices that can play but not store music.

"Consumers shouldn't have to worry what codec or which digital-rights management system their jukebox system supports. I know as a system vendor, we'd have to take the burden to translate those differences," said Hock Leow, chief technology officer and senior vice president at Creative Labs.

At the same time, S3's Reed said, "Our challenge is to pick the right format. It is our responsibility to call the shots in selecting highly leveraged formats to turn our players into an optimized system."

Creative Labs does not claim its Nomad Jukebox will be SDMI compliant. Leow said the device compares in size to a portable CD player and can store more than 150 CDs' worth of digital audio on a 2.5-inch hard-disk drive developed by Fujitsu.

Rights management
Nomad will support the MP3 file formats and Microsoft Corp.'s Windows Media Audio, which includes Microsoft's digital rights management. Creative Labs licensed but has not decided to integrate digital-rights management technology from InterTrust Corp. (Santa Clara, Calif.). Meanwhile, Creative is enforcing its own voluntary copy restriction mechanism, by physically blocking users from transferring music already downloaded into Nomad back to a PC's hard disk, according to Leow.

To ensure that consumers have enough digital content available to play, Creative will preload the Nomad system's hard drive with six hours of classical music, six hours of jazz and six hours of audio books. The music will be licensed from a Hong Kong-based company. "It will be prepaid by Creative," said Leow, in the same way that "today's PCs come with a bunch of software."

Competitor S3 is also developing a jukebox slated for launch within the next six months that will come with preloaded music. The Rio jukebox system lets consumers insert a CD, then rip tracks and store music files on its hard drive without the need for a PC. The Rio, which is likely to be based on the Linux operating system (although S3 would not confirm this), will also feature Internet connection to let consumers download music off the Web. The company does not claim that the system will be SDMI compliant.

To complement the jukebox, S3 also plans to roll out an Internet receiver that will allow consumers to stream, but not store, digital music from a PC to any room in the house. The receiver, the size of a hi-fi unit, will come with a 10-Mbit HomePNA-based network interface that can hook up with a PC via a phone line.

Running on a small Linux kernel, the system has no hard drive. It is strictly designed to stream digital audio content. It packs Cirrus Logic's EP7212 processor, whose ARM core functions as a control system to manage the user interface and request music from a PC. The same chip also decodes both Windows Media Audio and MP3 audio files.

Not to be outdone, Compaq Computer's Consumer Products Group — which last week introduced its first digital audio portable player, the iPAQ PA-1 — plans to launch an SDMI-compliant iPAQ jukebox player in the next year. It will have storage capacity of 6 Gbytes provided by either a magnetic- or optical-disk drive, said Kevin Kyle, vice president of the group's Internet and e-tronics division. To meet SDMI requirements the system will support several digital audio file formats in addition to MP3, Advanced Audio Coding (AAC) and Windows Media Audio, as well as digital-rights management systems.

The system won't be Compaq's first attempt at the jukebox category. Last year Compaq Labs developed an MP3-only personal jukebox (PJB), but decided not to market it because it was not SDMI-compliant, Kyle said.

Compaq licensed the PJB-100 product design to Hango, a South Korean manufacturer. Distributed by Remote Solutions, it is equipped with a Motorola DSP and a hard drive, stores 4.8 Gbytes or 1,200 songs, and costs $799 on the Remote Solutions' Web site.

Other companies have introduced non-SDMI-compliant digital audio jukeboxes as well. In April, Request Multimedia Inc. (Troy, N.Y.) rolled out a $799 jukebox for digital audio based on an Intel Celeron processor and a 17.3-Gbyte Quantum disk drive to store 300 hours of music. The system was designed for MP3-coded formats, but can also support Windows Media Audio formats via an Internet download.

SDMI sidestep
Request Multimedia president Steve Vasquez said the company avoided dealing with the issue of SDMI-mandated content protection technologies such as digital-rights management until it is convinced consumers want that support. The player is available on the company's Web site.

Like its larger competitors, Request Multimedia envisions the home MP3 system as "the central point for music in the home," Vasquez said, with Ethernet connections to other Internet clients and PCs around the house. But he does not think consumers should have limits on how they use that music or on the ability to transfer it to other devices in the home, as SDMI suggests.

The five major record labels have either launched or plan to launch online music trials by year's end that test a variety of audio codecs and digital content protection schemes.

Sony is conducting a trial with a limited number of titles using its own compression technology and content protection scheme. EMI Music began a trial in July with Liquid Audio and Microsoft's Windows Multimedia Audio codecs and digital-rights management systems.

This month, Universal Music Group started a trial with its own "bluematter" format, which combines technologies from InterTrust and Real Networks (Seattle). BMG Music plans a trial late this summer that supports IBM Corp's EMMS (electronic music management system) codec and digital-rights management solution, as well as Windows Media and InterTrust's technology.

S3 and Creative Labs plan to provide software upgrades for additional codecs and digital-rights management systems. In fact, S3 is preparing the first upgrade of the Rio 600 by making an AAC codec and the InterTrust system available on its Web site.