Dell Wants A Piece Of iPod Action

Dell is taking aim at Apple’s red-hot iPod.

Dell is offering its Digital Jukebox for $99 — $100 off — for customers who send in an iPod, as the company tries to get a bigger piece of the handheld device market. As part of the offer, Dell is also offering 25 free music downloads at its Digital Music Store, as it tries to woo customers away from Apple’s iTunes service.

The surprise in all this is how much Dell has lagged in the handheld device market, as Apple , palmOne and Research In Motion have grabbed a formidable head start. Dell was once considered a likely acquirer of Handspring, but palmOne got there first, and its success has come in good measure from sales of Handspring’s Treo devices.

Don’t count out Dell, but so far in the handheld space, the company finds itself in the unusual position of playing catch-up.

Stocks climbed Wednesday after the Federal Reserve’s first interest rate increase in four years was accompanied by language suggesting that rate increases may be modest.

The Nasdaq rose 12 to 2047, the S&P 500 climbed 4 to 1140, and the Dow gained 22 to 10,435. Volume rose to 1.47 billion shares on the NYSE, and 1.76 billion on the Nasdaq. Advancers led 24-8 on the NYSE, and 19-12 on the Nasdaq. Upside volume was 71% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 126-9 on the NYSE, and 65-18 on the Nasdaq.

Research in Motion soared 15% after beating estimates and raising guidance.

Microsoft edged higher after a court upheld the company’s antitrust settlement.

Lexar fell 17% on a warning, while Electro Scientific surged 18% after raising guidance.

AT&T was flat after launching new VoIP service.

Inet jumped 16% on news that it will be acquired by Tektronix .

Mamma.com dropped 8% on a stock sale.

Netflix climbed 5% on an upgrade.

Sonus surged 15% on hopes for a Nasdaq relisting.

Overland edged higher despite warning.

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