MP3 Anointed King Of The Portables

Las Vegas— MP3 portables will celebrate a crowning achievement at January’s CES.

From their modest beginnings in 1998, compressed-music portables are expected by the end of 2004 to exceed sales of headphone CD portables for the first time, based on January-September factory-level sales tracked by CEA.

Suppliers will celebrate MP3’s coronation as king of headphone portables with an orgy of MP3 introductions, the entry of more newcomers into the market, and a growing focus by established suppliers on the segment.

For the January-September 2004 period, factory-level dollar sales of headphone CD players fell to $355 million while MP3 portable sales grew to $412 million, said senior analyst Steve Koenig, who cited the growing share of HDD-based MP3 players that carry relatively high price tags.

MP3 newcomers include X2, Sherwood, Olympus and one other major A/V supplier. Earlier this year, BenQ and Lexar entered the market, and Go Video’s Rave brand returned.

At CES, dealers will find:

• some of the first music portables with digital-picture viewers in HDD and flash-memory versions. At least three A/V suppliers will show their first such models, and one other company will expand its selection to two. At least one of these companies will show one of the first picture-viewing flash portables.
• some of the first flash-memory and HDD music portables that play subscription-based Windows Media Audio (WMA) downloads, which users can enjoy on their portables and PCs as long as they pay a monthly subscription fee. Dealers will see the first such models from at least three A/V suppliers.
• a growing selection of 5GB HDD models, thought to offer more than adequate capacity in smaller sizes than 20GB, 30GB and 40GB models. At least three established MP3 suppliers plan to show their first, and Olympus will enter the portable market with one.
• a growing-but-still-small selection of flash models with 1GB of memory to appeal to active users who fear HDD crashes and to anyone seeking longer battery life. Dealers will see the first such models from at least three companies.
• more HDD portables sporting video playback, with at least one model, due from Archos, adding PDA-type applications and Web browsing.