Portable music player sales to surge through 2009

According to IDC, the market for portable music players will be staggering by 2009—as if it wasn’t already.


“Demand for portable MP3 players is booming, as more and more consumers get acquainted with their stylish form factors and digital audio functionality”, said Susan Kevorkian, program manager, Consumer Markets: Audio at IDC. “In addition, DVD players, mobile phones and gaming devices that play back compressed audio will be key drivers of the compressed audio player market during the forecast period.”

The report divides the portable music player market into four groups: MP3 capable disc players, flash MP3 players, hard drive MP3 players, and an “other” category. Interestingly, the other category, which includes handheld games and cellphones, will be by far the largest by 2009, with some 700 million units and revenue of US$114 billion. The total market, including dedicated music players, will be some 945.5 million units and US$145.4 billion. Don’t count Apple Computer out yet, though. The number of flash based hardware devices, like the iPod Nano, is expected to number some 124 million units by 2009, up from 26.4 million in 2004. Also, the maximum flash capacity for such devices is expected to rise to 8GB in 2006, and 16GB by late 2007. Hard drive based units are expected to see a compound annual growth rate of 21.5 percent. Finally, demand for video playback and the ability to download video is expected to drive sales of both flash and hard drive based players. “The way Apple is approaching it is very smart,” Ms. Kevorkian said. “They’re able to leverage the popularity of their players. . .and experiment with non-music video content.”

Yesterday’s announcement by Apple Computer of a video iPod and accompanying (meager) video downloads plays into this strategy. If Apple is able to duplicate the success of the iTunes Music Store with video, it would assure its dominance of the portable media player market for the foreseeable future. However, that “if” is huge, especially in light of the massive growth in MP3 “capable” cellphones, but does the non-technology enthusiast listen to music on their phones? And what about Microsoft? The corporate giant recently walked away from the music labels and into the arms of former rival, Real Networks. Undoubtedly, Microsoft has big plans for portable music and video, as it’s hard to imagine the company settling for a secondary position in any of its markets over the long term. It will be interesting to see who’s on top in 2009.


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