South African suppliers of compressed audio players (MP3) are still trying to predict local demand, while the international market is expected to be worth $58 billion (R645 billion) by 2008.
US-based research firm International Data Corporation (IDC) says MP3 sales are continuing to boom worldwide with an expected compound annual growth rate of 20% per year for the next four years.
IDC says broad consumer acceptance of MP3 players is being driven by a variety of factors, including falling price points, the availability of music from legitimate online music services, and the integration of compressed audio support in a wide variety of digital devices, including DVD players and gaming devices.
The worldwide portable flash player market exploded in 2003 and is expected to grow from 12.5 million units in 2003 to over 50 million units in 2008, fuelled by falling flash memory costs and the availability of players at multiple storage capacities.
IDC says Apple, which has been a portable jukebox market leader since introducing the iPod in late 2001 and iPod mini in early 2004, will see new competition in the portable jukebox player market during the forecast period from vendors offering devices based on smaller hard drive form factors.
Bruno Verollini, head of Apple South Africa, says the size of demand for portable music players is fairly unknown. "We have tried to determine the size of the South African market, but no one really has a handle on it yet."
Apple launched its iPod mini MP3 player in July in SA, and Verollini says sales have been increasing by 300% to 400% per month, although it is off a small base.
Stephan Rabe, a director at Reviva Technology, a distributor of Taiwanese manufactured MP3 players, says the market grew fast in the first six months of the year, but then retail orders stabilised.
"We continuously get queries from more and more retailers for the devices, but orders quickly stabilise. This Christmas season will be important to see just how much the ordinary man in the street is into these things," he says.
Rabe agrees with IDC`s assessment that MP3 players are being increasingly bundled with purchases of other electronic goods including cellphones and this could cloud market statistics even more.
According to IDC, the portable and home MP3 CD/MiniDisc player categories will grow only modestly during the forecast due to stagnating portable and home CD player markets, growing consumer awareness of and falling price points on portable flash and jukebox devices, and cannibalisation by DVD players and DVRs of standalone home compressed audio players.
"The availability of subscription and pay-per-download paid music service providers (MSPs) will drive demand for compressed audio players by providing an exciting new source of music content for consumers and because paid MSPs are expected to partner with device manufacturers on consumer education and marketing programmes."
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