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MP3 Shipments Decline as Music Phones Take off, Finds IDC

  • 30 April, 2007 16:13

<p>NORTH SYDNEY, 30th April 2007 - IDC’s latest digital consumer research recently found that the portable MP3 player market is beginning to slow down, and is facing a lot of competition from viable alternatives, namely music phones.</p>
<p>Reaching critical mass within two years, there is no doubt that portable MP3 players were adopted at record speed. As the portable MP3 player market reaches saturation and faces heated competition from alternative devices, IDC expects market growth to slow considerably.</p>
<p>This study, titled "In My Place: Australia Portable Compressed Audio (MP3) Player 2007-2011 Forecast and Analysis," examines the market dynamics of portable MP3 players in Australia, contrasting it against the market for music phones. This study also provides market sizing and forecast of unit shipments, revenue, and average selling prices for portable MP3 players for the 2006–2011 forecast period.</p>
<p>Within the digital audio market, Apple has maintained its dominance on both the device and service fronts. On January 9, 2007, Apple announced at MacWord that the company will launch the iPhone, venturing into the mobile phone market.</p>
<p>According to IDC, Apple's announcement will shift consumer mindshare from standalone MP3 players towards music phones, and will educate mainstream consumers to consider mobile phones as viable options. This will impact the growth of the standalone MP3 player market especially at a time when the market relies on replacement purchases.</p>
<p>IDCs study finds that music capabilities on phones have already reached mainstream. Whether or not consumers are using phones to substitute standalone MP3 players is a different question, there is no doubt that handset vendors are ready to position music phones as viable substitutes for standalone MP3 players.</p>
<p>IDC believed that music phones will become increasingly attractive to the mass consumer market with handsets being subsidized by the mobile operators. By 2011, IDC predicts that music phones will reach a penetration of 84% amongst mobile users.</p>
<p>"Handset vendors, most notably Sony Ericsson, have well-positioned sub-brands that target a music-centric audience and are investing heavily into this area. At the same time, mobile operators are urging mobile users towards embracing their 3G content portals and music services to minimise subscriber churn and to increase average revenue per user, thus further escalating the marketing push behind music phones," said Jerson Yau, Research Analyst for Mobility &amp; Wireless Research, IDC Australia.</p>
<p>As music phones become ubiquitous, it will become increasingly more difficult to induce consumers who have not yet adopted a standalone MP3 player to buy one, further limiting portable MP3 player market growth.</p>
<p>IDC Definitions</p>
<p># Music phones: Music phones refer to cellular handsets that support the playback of portable compressed audio, such as MP3 files. Phones that are only capable of FM radio are not included in this definition.</p>
<p># Portable players: Portable compressed audio players are designed to be small, light, and transportable. Portable players are battery powered and may also include AC power support. Note that portable devices can connect to automotive and home stereo systems via adapters. This category includes subcategories defined in the following sections, based on storage media.</p>
<p># Portable flash: Portable flash players are based on solid state flash memory.</p>
<p># Portable jukebox: Portable jukeboxes are based on hard drives, including 2.5in., 1.8in., 1.0in., and sub-1.0in. hard drive form factors.</p>
<p>IDC research:</p>
<p>If you would like further information or to purchase IDC research, please contact Gary Clarke, IDC Associate VP of Sales via email or phone 02 9925 2226.</p>
<p>For press enquiries please contact:
Jerson Yau
Research Analyst, Wireless &amp; Mobility
Phone: 61 2 9925 2205
<p>Click here to view the press release online:</p>
<p>Click here to subscribe to IDC press releases and newsletters online:</p>

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