A quick look around the just opened Flatbush, Brooklyn location of
TWICE: How did the unit/dollar mix of flash-memory devices vs. HDD MP3 change at retail in 2007, and what are the prospects for 2008?
Andy Mintz, Philips: Because the cost of players with bigger screens and more flash memory have come to a more affordable price level, PMPs based on solid-state technology have become increasingly popular. That said, our perspective is that it has less to do with technology and more to do with ease of use in terms of providing a positive customer experience.
We anticipate an increasing trend in consumer preference for solid state technology due to its smaller size and product durability.
Ross Rubin, The NPD Group: We continued to see the market shift from hard-drive-based players to flash-based players in 2007. For the 12 months ending October, hard-drive-based player sales dropped about 8 percent, while flash-based players grew 35 percent. However, the shift was even more dramatic in 2006. As flash price-performance continues to grow and accommodate more digital music, consumers will flock to the thinner designs that the solid-state memory accommodates.
TWICE: What features grew in popularity in 2007, and your expectations for 2008? Possible topics include Wi-Fi downloading, Bluetooth stereo, Wi-Fi streaming of Internet radio stations and built-in TV-time-shifting capability.
Mintz: Because Bluetooth chipsets have become more cost-effective, battery-efficient, smaller and lighter, we are filling a consumer need by offering Bluetooth-enabled audio players that will work with all Bluetooth products.
Larry Smith, Archos: Archos introduced the first Wi-Fi movie-download service directly to a PMP in 2007. We also introduced the first PMP that can view Web sites in their native formats and play flash video on the device. Tighter integration between the PMP and the TV was also a big part of the strategy in 2007, with the first electronic program guide built into the PMP. Essentially, 2007 was about providing the easiest access to content, whether that be movies, music or photos, and Archos centered its entire generation-5/2007 line on this trend.
In 2008, we see a continued emphasis on easy access to content. Having said that, Archos is always on the cutting edge of technology in this space, and 2008 should be no different. With the introduction of the Archos TV+, Archos will integrate a fully functioning set-top DVR with fast USB 2.0 download speeds to a PMP. Easy access to content, ease of use and the slimmest PMP with significant capacity will all be a part of the 2008 line for Archos.
Rubin: As Apple drives most of the volume in this category and has shied away from many of these features, we haven't seen most of them have that much impact. There was certainly more experimentation with and expansion of the role of Wi-Fi from Archos, SanDisk and Microsoft. Samsung moved forward with Bluetooth stereo, and RCA tried a Bluetooth alternative with Kleer for wireless ear buds.
TWICE: Why has demand been low for converged MP3 players/portable satellite radios?
Rubin: This could be due to a number of factors including satellite radio recording limitations, battery life, competition with the iPod (both for purchase and usage), added fees and coverage. XM and Sirius are starting to do more deals with broadband distribution of their content, and this will likely be the bridge to more portable devices. The Slacker Portable is a promising alternative. The site has attracted a million listeners in a short time with a fraction of the expenditures satellite radio companies have made in marketing and content acquisition.
TWICE: What is the niche for an authorized video or music download site in an era when most copyrighted content is widely available through file sharing?
Mintz: Philips believes that authorized music and video subscription-based sites, such as Rhapsody, will be the preferred way of downloading content in the future.
Rob Williams, RealNetworks: There will continue to be growing consumer interest in premium services that provide a safe, high-quality entertainment experience both on the PC and through Web-connected and portable devices. For example, Rhapsody delivers access to millions of songs on-demand through a number of touch points including the PC, in-home audio systems like the Sonos and Denon's new tabletop radios, and via Wi-Fi connected devices like the Haier Ibiza Rhapsody and Nokia's N810 tablet. Every song imagined just about is available with album art, reviews, artist information and personalized recommendations creating a rich music experience that P2P networks cannot even come close to offering.