- 4 May 2006 -

MP3 player market to reach 286 m units by 2010

According to new research from In-Stat, the worldwide market for flash-based and hard disk drive (HDD)-based MP3 players will jump from 140 m units in 2005 to 286 m by 2010. Drivers for this market include falling price points, the availability of legitimate subscription and pay-per-download online music sites, increasing flash memory capacities, and enhanced functionality, the market research firm said.

"Apple continues to dominate the market for MP3 players, particularly in the US," says Stephanie Guza, In-Stat analyst. "Apple competitors continue to face significant challenges, such as a constrained flash memory supply, device and software integration, and the 'cool factor' associated with Apple's iPod line of products."

In-Stat's consumer survey data shows 49% of MP3 player owners own an Apple iPod. Sales of low-end, flash-based players were especially strong in 2005, particularly in Asian markets where some players are priced as low as $25.

The research, "Portable Digital Audio Players: Market Growth Exceeds Expectations" (#IN0603155ID), covers the worldwide market for digital audio players. It includes results of a consumer survey about MP3 player ownership, profiles of leading portable audio player manufacturers and suppliers, as well as forecasts for portable audio player shipments and revenue through 2010.

EDITORIAL COMMENT: MP3 players may seem frivolous but they are big business. As an end-use application for III-Vs they are limited to display backlighting. Even that is under threat, of course. Sony and others are looking to OLEDs (which do not require backlighting) for design and ergonomics. The rejuvenated Sony Walkman which was launched last year is a good example. However, despite its attractive lines it has yet to challenge the dominance of the iPod. More to the point is the competition between standalone MP3 players and the integration of this function into cellphones. Handset makers Nokia and Motorola have added MP3 functions - flash and HDD - to high-end music phones. The jury is still out as to how these will affect sales of either the phones or players and therefore the impact on component supply.

http://www.in-stat.com