Nike to develop MP3 player

Sports giant Nike is gearing up to climb onboard the portable digital music player bandwagon.

The company has set up a hi-tech sports division which will sell a range of digital devices bearing the Nike brand.

Nike is expected to partner with S3, which markets the Diamond Rio MP3 Player, to develop the Nike Personal Sport Audio Player, which is slated for launch in the US as early as July.

"Expect a funky-looking Rio with Nike stamped on it that will appeal to the MTV generation," said a source close to the project.

The player will be sold through Nike's website, and the company is also intending to provide digital downloads and content.

Nike is expected to release a new collection of sports clothes with specially designed pockets for the gadgets.

S3 is believed to be in discussions with other big-name brands to bring the Rio to a much wider audience. It is also looking at converging the MP3 player with mobile phones and digital organisers.