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MP3 Players and Other Portable Audio Players - US

Published by: Mintel International Group Ltd.

Published: Jun. 1, 2006 - 127 Pages


Table of Contents


INTRODUCTION AND ABBREVIATIONS

Introduction

Definition

Abbreviations and terms


Abbreviations

Terms




EXECUTIVE SUMMARY

Segment reversal in portable audio

Portability, broadband and accessories drive MP3 player sales

Radio - an old/new segment

The iPods have it

Not Apple


Sony

Creative


Advertising and promotion—is it cool?

Preferred sources for MP3 players

The next small thing

Product convergence and competition

Compatibility and connectivity, concerns for the future




MARKET DRIVERS

Portable audio paradigm shift

Downloadable music services help grow MP3 player sales


Legal vs illegal music


Figure 1: Legal music downloads, April 2006


Figure 2: Frequency of music downloads, April 2006


Potential downside to device/download connection


Growth of broadband and the Internet


Figure 3: US broadband household projections, 2000-10


Figure 4: Manufacturers’ shipments of CDs and cassettes vs single and album downloads, 2004-05


Three key consumer groups


Figure 5: US Population, by generation, 2000-10


Figure 6: Ownership of portable music players, by age, April 2006


Figure 7: Ownership of MP3 players, by gender, April 2006


Hispanic population owns more MP3 players


Figure 8: US population, by age and Hispanic origin, 2006


Figure 9: MP3 player, music service, and satellite radio ownership/subscription, by ethnicity, April 2006


iPod + iTunes = icon



Figure 10: Apple Computer/iPod activity, 2001-06


Whistle a happy iTune

The downside of being market leader


MP3 player accessories


Expanding MP3 player capability


Figure 11: Ownership of MP3 player accessories, April, 2006


Into the house

Into the car


Convergence

Competition from cell phones

New uses for new technology




MARKET SIZE AND TRENDS


Figure 12: Total US manufacturer sales of MP3 players and other portable audio players, at current and constant prices, 2001-06


Figure 13: Graph: Total US manufacturer sales of MP3 players and other portable audio players, at current and constant prices, 2001-06




MARKET SEGMENTATION

MP3 players versus other portable audio players - a contrasting story


Figure 14: Total US manufacturer sales of MP3 players and other portable audio hardware, at current prices,-06


Figure 15: Graph: Total US manufacturer sales of MP3 players and other portable audio hardware, at current prices, 2001-06


Segmented by format



Figure 16: Sales of portable audio players, segmented by format, 2004 and 2006


Portable MP3 players


Figure 17: Manufacturer sales of portable MP3 players, at current and constant prices, 2001-06


Portable CD players/boom boxes


Figure 18: Manufacturer sales of portable CD players/boom boxes, at current and constant prices, 2001-06


Figure 19: Unit sales of portable CD players, with average unit price, 2001-06


Figure 20: Graph: Change in unit sales of portable CD players compared with change in average unit price, 2001- 06


Portable radios & cassette players/recorders


Figure 21: Sales of portable radios & cassette players/recorders, at current and constant prices, 2001-06


Satellite Radio




SUPPLY STRUCTURE

COMPANIES AND BRANDS


Introduction

Apple Computer, Inc


Overview

iPod

iTunes Music Store


Sony Corporation of America


Overview

MP3 players

Other portable audio players

Connect Music Store


Creative Labs

SanDisk45 iRiver America

RCA

Philips Electronics North America

Samsung Electronics Co, Ltd

Panasonic Corporation of America




ADVERTISING AND PROMOTION


Introduction


MP3 players, give away and cross promotion

Satellite Radio



COMPANIES


Apple


iTunes Marketing


Sony

Samsung

Panasonic

Toshiba 53 iRiver

Dell

SanDisk

Philips




RETAIL DISTRIBUTION

Overview

Source of MP3 player purchase


Figure 22: Type of retail location of MP3 player purchase, April 2006


Figure 23: Specific retail location of MP3 player purchase, April 2006


Best Buy

Wal-Mart

Circuit City

Target

RadioShack

Apple Store

Sony Style

Catalog/Internet retailers




THE CONSUMER

Introduction

Summary


Portable audio ownership patterns

Portable audio purchasing patterns

Technology attitudes

MP3 player usage

User satisfaction


Ownership patterns of portable players, accessories, and subscription services


Figure 24: Ownership of audio products/subscription to services, May 2006


Figure 25: Ownership of audio products/subscription to services, by age, May 2006


Figure 26: Don’t own audio products/subscription to services, but plan to get in next 6 months, by age, May 2006


Figure 27: Ownership of audio products/subscription to services, by household income, May 2006


Figure 28: Don’t own audio products/subscription to services, but plan to get in next 6 months, by income, May 2006


Figure 29: Ownership of audio products/subscription to services, by Hispanic origin, May 2006


Figure 30: Don’t own audio products/subscription to services, but plan to get in next 6 months, by Hispanic origin, May 2006


Figure 31: Ownership of audio products/subscription to services, by presence/number of children in household, May 2006


Figure 32: Don’t own audio products/subscription to services, but plan to get in next 6 months, by presence/number of children in household, May 2006


Ownership patterns of MP3 players



Figure 33: Gift receipt and giving and multiple ownership of MP3 players, May 2006


Figure 34: Gift receipt and giving and multiple ownership of MP3 players, by age, May 2006


MP3 player brands owned


Figure 35: Brands of MP3 players owned, May 2006


Figure 36: Brands of MP3 players owned, by age, May 2006


Figure 37: Brands of MP3 players owned, by household income, May 2006



Portable audio purchases


Figure 38: Stereo/radio equipment bought in previous 12 months, January-September 2005


Amount spent on portable audio


Figure 39: Amount spent on last portable audio purchase, May 2006


Figure 40: Amount spent on last portable audio purchase, by gender, May 2006


Figure 41: Amount spent on last portable audio purchase, by age, May 2006


Figure 42: Amount spent on last portable audio purchase, by Hispanic origin, May 2006


Retail locations where MP3 players are purchased


Figure 43: Location of MP3 purchase, May 2006


Figure 44: Location of MP3 purchase, by presence/number of children, May 2006


Figure 45: Location of MP3 purchase, by location, May 2006


Stores where MP3 players are purchased


Figure 46: Store, website, or catalog where MP3 player purchased, May 2006


Figure 47: Store, website, or catalog where MP3 player purchased, by household income, May 2006


Technology purchasing attitudes of respondents


Figure 48: Attitudes towards new technology purchases, May 2006


Figure 49: Attitudes towards new technology purchases, by age, May 2006


Figure 50: Attitudes towards new technology purchases, by race/ethnicity, May 2006


Figure 51: Attitudes towards new technology purchases, by presence/number of children, May 2006


MP3 player capacity


Figure 52: Storage capacity of MP3 players, May 2006


Figure 53: Storage capacity of MP3 players, by age, May 2006


Plans to upgrade MP3 player


Figure 54: Plans to upgrade MP3 player to increase capacity, May 2006


Figure 55: Plans to upgrade MP3 player to increase capacity, by household income, May 2006


Figure 56: Plans to upgrade MP3 player to increase capacity, by presence of children, May 2006


Satisfaction with MP3 players


Figure 57: Overall satisfaction with MP3 player, May 2006


Figure 58: Overall satisfaction with MP3 player, by age, May 2006


Figure 59: Overall satisfaction with MP3 player, by household income, May 2006


When MP3 players are used the most


Figure 60: Activities while listening to MP3 players, May 2006


Figure 61: Activities while listening to MP3 players, by age, May 2006


Figure 62: Activities while listening to MP3 players, by income, May 2006


Amount used


Figure 63: Hours per week spent listening to MP3 player, May 2006


Who pays to download music


Figure 64: Purchase of downloaded music, May 2006


Figure 65: Purchase of downloaded music, by gender, May 2006


Figure 66: Purchase of downloaded music, by age, May 2006


Figure 67: Purchase of downloaded music, by income, May 2006


Download frequency


Figure 68: Frequency of music downloads, May 2006


Figure 69: Frequency of music downloads, by age, May 2006


Satisfaction with download process


Figure 70: Ease of download process, May 2006


Downloads other than music


Figure 71: Non-musical downloads, May 2006


Figure 72: Non-musical downloads, by gender, May 2006




FUTURE AND FORECAST

FUTURE TRENDS


US Hispanic population growth


Figure 73: Population by race and Hispanic origin, 2001-11


Advances in NAND memory

Video MP3 players

Satellite radio


Potential portable problems


Competition from hybridization

Connectivity and compatibility

More competition from cell phones

Creative v Apple

The MP3 world beyond Apple


MARKET FORECAST


Portable MP3 players


Figure 74: Forecast of total US manufacturer sales of portable MP3 players, at current and constant prices, 2006- 11


Figure 75: Graph: Forecast of total US manufacturer sales of portable MP3 players, at current and constant prices, 2006-11


Forecast factors




APPENDIX: TRADE ASSOCIATIONS

Abstract

In 2006, the MP3 and portable audio player market is worth an estimated $5.7 billion in manufacturer sales, almost three times its worth of just over $1.9 billion in 2001. During this time, MP3 players have gone from niche to mainstream products, and consumer portable purchases have switched from models that rely on removable content to those whose content is additive and intrinsic. MP3 players have freed consumers from the need to carry around separate music media like CDs or cassettes.

The title of this report--MP3 and Other Portable Audio Players--reflects this fundamental shift. The MP3 player segment, with only about 5% market share in 2001, surpassed combined sales in all other segments in 2004 to claim well over 50% of the market’s sales. By 2006, MP3 players are responsible for an estimated 88% of manufacturer sales in the portable audio market.

Ownership among adult respondents is highest at ages 18-24, declining with increasing age, whereas ownership of CD players is more constant for ages 18-54 before falling off, and ownership of portable cassette payers is lowest for the youngest adults.

Retailers who sell portable audio are focusing more on MP3 players, as sales in other segments shrink. By the end of the period under review, portable audio player segments are morphing so that many devices, from CD players to radios, now also feature MP3 capabilities. And besides audio features like radio, MP3 players are also expanding into other functions besides music, notably video.

In this report, Mintel clearly identifies the principal external factors driving or curtailing growth. Exclusive consumer research reveals the attitudes, needs and behavior of consumers, with analysis broken down both by demographic characteristics, and by segment.

Six years of specific sales data provide a factual and impartial presentation of the market as a whole. Mintel also evaluates the performance of individual sectors in the market, and provides information about the major companies and brands. Using the SPSS forecasting package, Mintel creates a five-year forecast of U.S. retail sales, revealing potential opportunities for growth and product development.

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