Lucent Technologies Inc is working with e.Digital Corp to build a new handheld device for playing music downloaded from the internet. The device, which e.Digital plans to manufacture, will use the Lucent Enhanced Perceptual Audio Coder (EPAC) and a new class of digital signal processors (DSPs) made by Texas Instruments Inc. The device is Lucent’s Rio-killer, aimed squarely at Diamond Multimedia Systems Inc’s successful Rio PMP300 platform.

The Rio uses the MP3 audio compression format, beloved of internet music fans and hated by the record industry for exactly the same reason: it has no copyright protection mechanism, making it easy to rip off, share and trade the record labels’ intellectual property. Lucent, by contrast, is a member of the Recording Industry Association of America (RIAA)’s Secure Digital Music Initiative (SDMI), an effort to secure MP3 or create a copyright-protected alternative. The availability of an SDMI- compliant player is key to RIAA’s counter-MP3 tactics. Whether internet music fans will desert Diamond’s popular Rio for an industry-approved, impossible-to-pirate alternative remains to be seen.