SanDisk, RealNetworks in Digital Music Pact

Digital music deals continued to percolate on Monday with RealNetworks' (RNWK) announcement that its music service will be integrated into SanDisk (SNDK) MP3 players this fall.

With Microsoft's (MSFT) plans to enter the digital music market with its new Zune media player in time for the holidays, digital media companies, device manufacturers and wireless carriers have been gearing up to fend off the challenge.

SanDisk's Sansa e200 series of portable players will be linked with Real's Rhapsody music service and will be sold preloaded with close to 32 hours of music. The devices will update automatically, on the basis of the user's tastes and song choices. The specialized platform is called Rhapsody DNA.

Investors applauded the deal on both fronts. Real's shares bubbled up 3.2%, or 32 cents, to $10.49 on Monday. Meanwhile, SanDisk added 3.9%, or $2.25, to $60.76.

"Rhapsody DNA is an amazing innovation that puts the celestial jukebox into the consumer's pocket," Rob Glaser, chairman and CEO, RealNetworks said in a statement. "Together, Real and SanDisk will soon deliver great new end-to-end experiences that make it easier and more fun than ever before for consumers to discover and enjoy music."

"This partnership with Real demonstrates SanDisk's commitment to bring consumers an array of options on how they receive and enjoy their music," Eli Harari, president and chief executive officer of SanDisk said in a statement.

Last week, Real announced it inked a deal with privately-held device manufacturer Sonos to provide its customers with the Rhapsody service.

>To order reprints of this article, click here: Reprints