September 21, 2004 11:04 AM PDT

Study: MP3 player market to explode

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The worldwide market for MP3 players will hit $58 billion by 2008, according to a study released on Tuesday by IDC.

A major point in the IDC study is the impending competition that awaits Apple Computer's extremely popular iPod music player. The market researcher said several vendors are set to launch portable jukeboxes based on 1-inch or smaller hard drives, which could pose a tough challenge to iPod.

The biggest growth in MP3 players should come from portable flash players, the IDC report predicted. The volume of flash players shipped will jump to 50 million units in 2008, up from 12.5 million in 2003. Other segments will grow modestly.

In particular, the portable and home-based MP3 CD/MiniDisc player categories will be hurt by slowness in the overall markets for those devices and by falling prices for rival portable flash and jukebox devices.

Those falling prices, along with the increasing availability of music from legitimate online music providers, will drive demand for compressed audio players, IDC said.

Growth in the overall audio player market will provide "new opportunities" for chip vendors, device manufacturers and paid music service providers, IDC analyst Susan Kevorkian said in a statement.

Also aiding the growth will be the eagerness shown by companies to integrate compressed audio support as a secondary feature in a variety of digital devices, such as DVD players and game consoles. Recently, Hitachi released a new, leaner hard drive that is easy to integrate with consumer electronics devices.

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impending competition?
Silly statement. The iPod already has competition. Why cite impending competition? Unless you are admitting what we already know: there really is no real competition to the iPod.
Posted by nmcphers (261 comments )
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Analysts Wrong on iPod Again
iPod may face some competition, but the analysts forgot to look at the consumer. And the consumer does the buying. 85% of a purchase decision is based on looks, 10% on price and 5% on "features" of a technical product. Any marketer knows this.

Smaller hard drives? Flash drives? Impacting the overall market? You can use an iPod as a Flash drive! What other mp3 player has over 1,000 accessories made for it? And accessories are a key, since if you have an iPod you likely have a home audio box for it, car kit and other accessories. Just going to throw them out? Not likely. iPod will remain a market leader, and losing 3% of the US market will be made up in gains in other markets. And iPod has brand value and presence. The consumers know better in this case, not the analysts.
Posted by Webconomist (10 comments )
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