Sales of MP3 players expected to soar

More competition = cheaper prices = MP3 players for all, say analysts
Written by Richard Shim, Contributor

The market for digital-audio players is booming, according to a new study.

Market researcher IDC's study forecasts that worldwide shipments of digital-audio players will grow from 3.3 million last year to 26 million in 2005. The bulk of these shipments will take place in the United States. IDC expects that US shipments will grow from 2.8 million in 2000 to 18 million in 2005.

The high cost and limited capacity of flash memory, the type of storage used in most digital-audio devices, has held back the market so far. However, IDC expects that more manufacturers will enter the market and begin to use less expensive and higher-capacity storage, such as hard disk drives and CD-rewritable discs.

"The use of different types of [storage] will mean price and capacity benefits to consumers, which will drive demand and help the market grow," IDC analyst Bryan Ma said Wednesday.

The study predicts that devices using alternatives to flash memory will control a large piece of market share toward 2005. The use of alternative storage should also allow manufacturers to develop more types of devices. Some of these categories are already popping up in the form of portable jukeboxes with hard disk drives and soon-to-be-released in-car devices that play CD-RW discs.

Portable players will continue to dominate the market, IDC predicts, accounting for 61 percent of worldwide device shipments by 2005. Within the portable category, shipments of hard drive-based jukeboxes are expected to overtake those of devices with flash memory by 2004.

Other growth categories will include home-networked receivers and streaming Internet radios, but IDC projects that the market for these products will grow slowly.

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