Dell's Ditty Done Died

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Retreat is often as easy as wiping an entire product line off its virtual shelf, and that's exactly what Dell Computer (Nasdaq: DELL) has done with its DJ Ditty portable MP3 player. In a story first reported earlier this week in the iPodObserver.com blog, Dell has exited the iPod shuffle wannabe market by pulling the last of its players off the market.

It has been a gradual withdrawal. The company had already stopped making the larger capacity hard drive-based players, narrowing its offerings to the flash memory-based Ditty. Now its online store is peddling replacement players from the likes of SanDisk (Nasdaq: SNDK) and Creative (Nasdaq: CREAF) on its MP3-featured landing page. You can still get past the third-party items and purchase a Jukebox Ditty or two, but prominently promoting rival players and not even featuring Dell on an MP3 shopper comparison guide speaks volumes. With apologies to Aerosmith, the Ditty done died.

Failure was inevitable. Three out of every four portable music players in the market are Apple Computer (Nasdaq: AAPL) iPods, and the scraps left for everyone else were never going to make a dent in Dell's business. It's almost a blessing, really, because given the company's recent troubles, a little more focus in its core computing products will serve shareholders well. When you're as big as Dell, you can't afford to let a struggling side business distract you or bleed the brand.

Still, this isn't just a computer company. Beyond the related accessories, Dell diving into something like large-screen television sets makes sense as an extension of its monitor business. However, that's a highly fragmented market. It was almost embarrassing to see the company try to take on a monster like Apple's iPod. When your reputation is at stake, it's better to commit yourself only to battles that you stand a chance at winning. Besides, management's got some untapped ways to be cool if it wants to.

Dell has certainly gotten around in investing circles. A few years ago, it was initially recommended in the Motley Fool Stock Advisor growth stock newsletter service. More recently, the stock's pummeling finds it at home in the Inside Value camp of recommendations, as a potential turnaround.

So it's OK to let the music die, Dell. Just whistle while you work on getting back to basics.

Longtime Fool contributor Rick Munarriz has a Dell, but does most of his computing on an HP system. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. T he Fool has a disclosure policy.