MP3 Player Market Expanding Briskly

Technology research firm iSuppli expects the MP3 player market to continue its expansion in 2005, growing some 57 percent year over year. This follows a breakout year for the industry, which more than doubled in size during 2004. The firm said much of the success was related to the mass appeal of Apple's iPod, although no specific market share numbers were given.

iSuppli said that hard drive based audio players are coming of age, and consumers are increasingly turning to them over Flash-based players. The HDD player market is expected to grow by nearly 42 percent during 2005. By 2009, the firm said, it will account for 42 percent of all players sold, up from 26.6 percent last year.

"The iPod has demonstrated the appeal of HDD-based MP3 players, which can hold far more music than can flash memory based units," Shyam Nagrani of iSuppli wrote.

"Competitors have been moving quickly to offer products that ape the iPod's use of a 1.8-inch HDD, which can support the storage of several thousand songs and hours and hours of music playback."

Nagrani said that the "cool factor" plays a large part in the decision process of prospective buyers, which Apple has successfully played to its advantage. While initial models of the player were expensive, the company has strategically priced its units to better compete with rivals, he said.

iSuppli warned manufacturers against adding unnecessary features to their products.

"The so-called 'Swiss Army Knife' approach has not succeeded in the MP3 market," Nagrani wrote. "Simple, elegant products that perform a few functions with easy-to-use interfaces have sold well in the marketplace, while the do-everything approach has failed."