Demand for MP3 players continues to soar in the Asia/Pacific
Jul 20, 2006
According to IDC's latest report, "Asia/Pacific (Excluding Japan) Compressed Audio (MP3) Player 2006-2010 Forecast And Analysis" (Doc# AP654104N), the MP3 player market continued to enjoy phenomenal growth across Asia/Pacific (excluding Japan) (APEJ) in 2005, driven by demand for portable flash players. The MP3 player market in the APEJ region is expected to increase from 14 million units in 2005 to approximately 36 million units in 2010 at a compound annual growth rate (CAGR) of 20.8% during the forecast period.
"Demand for portable MP3 players in the region remained strong with 66.7% growth over 2004," said Claudio Checchia, Research Manager of Asia/Pacific Consumer Research at IDC. Portable flash players continue to fuel growth in the MP3 player market, with one market, the PRC, expected to continue to drive regional growth throughout the forecast period. The MP3 player market in the APEJ region is becoming more competitive and, as profit margins decrease, competition will only get tougher with more vendors expected to exit this market. Music-enabled mobile phones, portable media players (PMPs), and portable gaming devices that play back compressed audio files may impact the portable MP3 player market in the region during the forecast period.
As prices of portable MP3 players continue to fall, competition has intensified to the point that the MP3 players themselves continue to evolve at a frantic pace. The portable audio MP3 players sold in 2005 have become more versatile, less one-dimensional than the earlier products sold back in 2003. Devices based on flash memory are expected to progressively displace hard drive drive-based players, which will command an increasingly smaller share of the overall MP3 player market in APEJ. As a result, the portable flash player category will remain the leading type of portable MP3 player that consumers across the region will purchase going forward.
Key forecast findings include:
-- Video support for music video playback is expected to drive demand for portable flash players and hard drive-based portable MP3 players throughout the forecast period.
-- The market for flash-based portable MP3 players in APEJ is expected to grow at a CAGR of 21.3% during the forecast period.
-- Growth in the portable flash player category is expected to be fueled by falling flash memory costs, vendor adoption of flash for multiple device storage capacities at competitive retail price points, availability of paid online music services, and growing consumer awareness of and demand for portable MP3 players.
-- Hard drive-bases MP3 players in APEJ will grow at a CAGR of 17% during the forecast period.
The Singapore MP3 player market remained small grabbing only 2.8% share of the total APEJ MP3 player market. However, demand in Singapore was robust with the MP3 player market enjoying strong growth of 77.4% in unit shipments over 2004. IDC expects the MP3 player market to reach saturation level towards the end of the forecast period. As a result, IDC expects the Singapore MP3 player market to grow at a CAGR of 9% in unit shipments during the 2005-2010 forecast period.
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