Music player market set to double by 2009, study says

The market for MP3 players is set to double between 2005 and 2009 amid strong demand from consumers and hundreds of vendors striving to follow the success of Apple Computer Inc.'s iPod, a DisplaySearch Inc. analyst said in a conference in Tokyo on Thursday.

This year, the global MP3 player market should exceed 50 million units. That's nearly a third bigger than last year's figure, according to John Jacobs, DisplaySearch's director of Notebook Market Research. He did not present figures on the value of the market.

The single biggest reason for growth to date has been the success of the iPod, which has become a must-have item for many consumers. The iPod has inspired dozens of clones and there are now more than 500 vendors either designing or making MP3 players that are trying to cash in on the surging demand, he said.

"We estimate many other products are beginning to gain traction. By 2009, we expect the total market to surpass 100 million units," he said.

The combination of the user-friendly features of both the iPod device and the iTunes Music Store download service differentiate Apple from its competitors, and this combination should enable the company to maintain its dominant position in both the device and the music download market through at least the next few years, he said.

MP3 players can be divided into two categories; those that store songs and other data on hard disks and those that use flash memory chips, which retain memory when the current is switched off.

Generally speaking, flash-based players store hundreds of songs, while players with disks store thousands of songs. Flash-based players will continue to outsell disk-based players by a ratio of about three-to-two through the end of the decade, he said.

Apple's lineup of iPods will account for about two thirds of this year's market of about 21 million hard disk-based players. The market for flash-based players will reach about 30 million units this year, and the company's iPod Shuffle will account for about a fifth of those, he said.

While the MP3 market continues to climb, PMPs (personal media players), which can also play video, will not be a hit with consumers at all, he said.

There are currently 12 major vendors, including Samsung Electronics Co. Ltd. and iRiver Inc., trying to market PMPs as high-end alternatives to MP3 players, but the PMP market will stumble along at a few hundreds of thousands of units a year despite their efforts, he said.

Consumers are prepared to pay US$99 for basic flash-based MP3 players and three to four times that for high-capacity and feature disk-based versions because they are easy to use. By contrast, PMP players typically cost $400 to $700 and, because they play video encoded in MPEG-4 format, content can't be taken straight from the TV, he said.

"If I want to watch something on a PMP, I can't pull it off the cable box. I have to download it from my PC and then plug in the USB and then ... it's a hassle. You can buy a DVD player for $130, load up on your DVDs, which don't take any space at all in your briefcase, [and ] get what you want, where you want it," he said.

Subscribe to the Best of Macworld Newsletter

Comments