Dell has decided not to release a digital music player before the holiday shopping season, postponing the production on an indefinite period. The new product should be based on Dell’s entertainment software, which makes the package a potential competitor to Apple’s highly successful iPod player.

Earlier this year, Dell even tested prototypes of the MP3 player, which should have been based on entertainment software from Zing systems, but Dell will use Zing in order to organize and download movies and music across multiple products, including notebooks and desktops. This is not Dell’s first attempt to launch a line of MP3 music player. In 2006, the company pulled the plug on a line of MP3s launched in 2003, because of poor sales.

In order to prepare the launch of a music player, Dell has increased its presence at rock festivals, seeking to promote its brand among music-lovers and the consumer public in general. In a blog posting on Monday, Dell representatives talked about the delay of the MP3 line and the Zing software the company has recently acquired: "As we said a few months ago, our strategy focuses on content offerings and delivery platforms that mix Zing software, remote access and pre-configured media bundles across all of our devices, including licensing agreements with entertainment distributors. It has never been about a music player.”

Dell is the world’s second largest computer company by units shipped. The company is based in Round Rock, Texas, and it has been retooling its operation to confront slower demand. In August, Dell slashed 8,500 jobs out of a planned 8,900 headcount reduction. Even if the company hasn’t officially given any information about the MP3 music player line, it seems quite clear that Dell has delayed the launch of it because of the current economic conditions and Apple’s continued dominance of the digital music landscape. Nevertheless, the previous failed launch of an MP3 line is certainly a setback for the company.