Speculation that the PC manufacturer was planning to launch a player first surfaced when Dell purchased Zing Systems last year. Zing develops software that allows content to be wirelessly streamed to portable devices.

However Dell has kept its plans for Zing close to its corporate chest and it now appears the company has earmarked the technology for other uses.

Earlier this month a report in The Wall Street Journal, citing sources within the company, said Dell had withdrawn plans for a player, though no reason was outlined.

However speaking to iTWire, Michael Dell said reports of a withdrawal of plans to enter the market were incorrect.

“To withdraw plans, don’t you have to have had plans in the first place?” he said. When asked whether the company might have plans to launch a player in the future he simply said “No”.

Many industry watchers have tipped that adding a music player to its product line-up would help Dell gain ground in the highly competitive consumer space.

In recent months the company has invested considerable marketing efforts to promote its line-up of colourful notebook PCs. This comes at a time when many hardware companies are looking to consumer sales as a way of cushioning any downturn in corporate IT spending.

Like its competitors, Dell is already taking action to protect itself from the looming global economic downturn. In August the company said it had cut 8,500 jobs. Many remaining employees are being encouraged to take unpaid annual leave.