Growth expected for all portable digital audio products - Comment - consumer electronics industry

Electronic News,  August 5, 2002  by Cindy Wolf

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THIS YEAR HAS SEEN THE introduction of new products and services that, in effect, represent the beginning of a new era for digital audio. From file-swapping services to new online subscription services, from 32Mbyte portable players to 20Gbyte portable players, consumers now have more choices than ever for how they enjoy their music.

Online distribution of music has sparked increased interest in digital audio playback applications and products. Whereas for the last few years the portable market has been primarily flash-based, we are now seeing increased interest in a variety of storage media. This year will see the introduction of many new CD/MP3 and hard drive-based portable products from traditional as well as new market players. offerings to include a hard disk drive-based player. For example, SonicBlue has introduced the Rio Riot, RCA is expanding its Lyra line with a 10Gbyte and 20Gbyte player, and Creative Labs is also offering a 10Gbyte and 20Gbyte Nomad. Though these products are more expensive, they offer users the opportunity to manage their music collections with storage for up to 340 hours of music and the ability to carry it with them wherever they go.

Growth in these newer segments does not mean the end for flash-based players. These players have evolved from 32Mbyte devices to 64Mbyte and 128Mbyte devices as flash memory prices have dropped. They have the advantage of size because many of these players fit in the palm of the hand or can be strapped to the body for sporting activities. Flash-based players often sport flashy designs and car kits for consumers interested in the latest technology and design.

RELATED ARTICLE: Worldwide Portable Digital Audio Player Foreast

Worldwide portable digital music player unit shipments (including solid state and revolving media products) will grow from about 7.2 million in 2002 to almost 30 million in 2006. In 2003, In-Stat expects CD/MP3 player shipments to outnumber shipments of all other portable MP3 form factors, including CD and mini-disc players. These players will have lower retail prices than hard disk drive-based products. Blank CDs are very inexpensive, and many consumers have learned how to burn their own CDs. This represents a large opportunity for manufacturers currently serving or considering entering this market.

Taking a lesson from the success of the Apple iPod, this year most manufactures are diversifying their digital audio player

Digital audio is also being included in other consumer electronics products. These include mobile phones, PDAs, DVD players and car audio. There is also an increased interest from manufacturers in digital audio products for the home, such as jukeboxes and receivers, as more consumers become interested in managing their music collections. While concerns exist over product price-points and redundancy of features for many of these products, consumer interest seems to validate many of the products.

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Cindy Wolf is a research analyst with In-Stat/MDR and can be reached at cwolf@instat.com. In-Stat/MDR is owned by Reed Business Information, the parent company of Electronic News.

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