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Retail MP3 Advertising Surges; Select CE, PC Brands Dominate

11/24/2003 02:00:00 AM Eastern


Retail advertising of headphone MP3 portables surged again this year, and once again, 10 brands accounted for more than three-fourths of the advertised models, according to Beyen International Market Research.

In its survey of ads in more than 90 U.S. newspapers and catalogs, Beyen found the compressed-music portables appeared in advertising 12,705 times during the first three quarters, up 66 percent compared to the same time period in 2002 (see table at right). Most of the surge came in the first two quarters, when ad counts rose by 94 percent and 89 percent, respectively, before slowing to a 34 percent growth rate in the third quarter.

The statistics exclude headphone CD and MD portables that decode Internet audio codecs.

Like last year, high-capacity hard-disc-drive (HDD) music portables put in a strong showing, accounting for 27 percent of advertised models during the first three quarters, as they did during the same three-quarter period in 2002 (see table below). Again, those statistics exclude headphone CD and MD portables.

In 2002, a surge in fourth quarter HDD advertising raised full-year HDD ad frequency to 35 percent of all MP3 portables advertised.

In the first three quarters of 2003, 10GB models were the most frequently advertised HDD players, accounting for 10 percent of HDD models advertised. The next-most-advertised capacity was 20GB at 9 percent, followed by 15GB at 5 percent, 30GB at 2 percent and 40GB at 1 percent.

Based on the most frequently advertised HDD storage capacities, 20GB models on average offered the most capacity per dollar in the first three quarters of 2003, Beyen found. The average advertised price of 20GB models was $269.85 during the first three quarters, down from $381 in all of 2002. Of the most widely advertised capacities, 10GB models were advertised for $241 in the first three quarters, with 5GB models at $222, 15GB models at $331 and 30GB models at $490.

In 2003, no 40GB models were advertising until the third quarter, when an RCA model debuted at $299, delivering the most capacity per dollar based on average advertised pricing. In 2002, only one 40GB model was advertised, and that Creative Labs model appeared only in fourth-quarter ads at an average $499, Beyen found.

Flash first: Among flash-memory and HDD portables, the most frequently advertised storage capacity in the first three quarters was 128MB, which surpassed the ad frequency of 64MB models for the first time, Beyen found. The 128MB capacity was advertised 34 percent of the time, with 64MB models advertised 29 percent of the time, for a combined total of 63 percent of all compressed-music portables advertised.

Next came 10GB at 10 percent, 20GB at 9 percent, 15GB and 256MB at 5 percent each, 0MB at 4 percent, 30GB and 32MB at 2 percent each, and 40GB at 1 percent.

Among flash-memory models, high-megabyte models offered the most value when measured strictly in dollars per megabyte. The leaders in this category were 256MB models, which were advertised on average at $193, or 75 cents per megabyte, during the first three quarters. The 128MB models were advertised at an average $137, or $1.07 per megabyte. The 64MB models were $84 on average, or $1.31 per megabyte.

Basic models: Like last year, around three quarters of the advertised models in the first three quarters of 2003 were portables that lacked FM tuner, voice recording, or video recording features, Beyen found (see table at right).

All told, 73 percent of advertised models were "MP3-only" models, which despite their designation might decode multiple audio formats. Another 7 percent were MP3/ FM tuner models, 16 percent featured MP3 and voice recording, and 4 percent offered MP3, FM and voice recording. Another 4 percent featured MP3, FM and voice recording. And 1 percent offered MP3, MP4, and voice recording.

Features other than MP3 playback don't add much to the player's price tag, Beyen found. On average, MP3-only portables were advertised at $168 in the first three quarters of 2003, down from $194 in all of 2002. Models with FM were advertised at $169 on average, and MP3/voice-recodring models were advertised at an average $143. Models that had it all — MP3, voice recording, and FM —were advertised at an average $168.

Brand share: In another measure of MP3 advertising, Beyen found that 15 brands accounted for 87 percent of all MP3 portables advertised in the first three quarters of 2002 and 2003 (see table at far right).

The ad leader in the first three quarters was Creative Labs with a 13 percent share, followed by RCA and Sonicblue with 11 percent each, iRiver and Apple at 10 percent each, Philips with 9 percent, and Archos and Samsung with 5 percent each. Classic and First International came next with 4 percent and 1 percent, respectively.

Brands showing the most gains were Creative, rising to 13 percent from 4 percent; iRiver, rising from 3 percent to 10 percent; and RCA, rising from 8 percent to 11 percent. Their gains came at the expense of Sonicblue, whose share plummeted from 21 percent to 11 percent, and Samsung, whose share fell from 12 percent to 7 percent.

In all of 2002, Apple was first with 17 percent, followed by Sonic Blue, Creative Labs, Samsung, RCA, Archos, Philips, and First International. Classic and iRiver followed with equal shares of 3 percent.

MP3 Advertising Growth

Ad Count MP3 Players
2002 Q1 2,029
2002 Q2 2,228
2002 Q3 3,401
2002 Q4 6,768
2002 Total 14,426
2003 Q1 3,935
2003 Q2 4,213
2003 Q3 4,557
2003 Total 12,705
Total 27,131



MP3 Advertised Prices, Ad Shares (by included memory)

Average Price Q1-2002 Q2-2002 Q3-2002 Q4-2002 Q1-2003 Q2-2003 Q3-2003 Total 2002
64MB $114.53 $109.15 $104.19 $108.64 $96.24 $81.36 $74.12 $108.79
128MB $190.98 $181.08 $159.03 $154.63 $146.21 $129.21 $136.11 $159.18
20GB $340.99 $363.22 $397.27 $266.22 $268.10 $285.21 $381.12
10GB $312.47 $271.67 $338.13 $244.69 $240.57 $236.26 $324.40
32MB $63.46 $55.85 $59.15 $36.09 $52.60 $67.90 $74.35 $54.60
0MB $209.85 $163.94 $194.13 $203.24 $198.39 $181.15 $118.93 $194.55
5GB $349.10 $399.20 $338.53 $299.84 $258.73 $179.99 $177.12 $328.23
15GB $295.74 $223.79 $179.09 $179.99 $394.01 $331.29 $198.25
256MB $199.99 $205.87 $179.47
30GB $499.77 $479.68
40GB $499.00 $299.98 $499.00
8MB $129.00 $0.01 $164.67 $160.58
6GB $189.31 $118.92 $119.99 $167.78
340MB $349.99 $217.41 $133.24 $220.10
192MB $199.99 $229.00 $202.06
Total $147.81 $157.27 $184.94 $221.93 $161.46 $173.66 $161.16 $193.24
Ad Share Q1-2002 Q2-2002 Q3-2002 Q4-2002 Q1-2003 Q2-2003 Q3-2003 Total 2002
64MB 36% 28% 26% 26% 31% 28% 27% 28%
128MB 5% 7% 17% 21% 30% 32% 39% 16%
20GB 0% 12% 16% 19% 16% 8% 4% 14%
10GB 0% 11% 8% 18% 12% 12% 5% 12%
32MB 31% 32% 14% 7% 4% 1% 0% 16%
0MB 10% 7% 7% 2% 3% 3% 5% 5%
5GB 15% 1% 5% 5% 1% 0% 0% 6%
15GB 0% 1% 2% 2% 2% 5% 7% 2%
256MB 0% 0% 0% 0% 1% 7% 7% 0%
30GB 0% 0% 0% 0% 0% 4% 3% 0%
40GB 0% 0% 0% 0% 0% 0% 3% 0%
8MB 0% 0% 3% 0% 0% 0% 0% 1%
6GB 3% 0% 0% 0% 0% 0% 0% 1%
340MB 0% 0% 1% 0% 0% 0% 0% 0%
192MB 0% 0% 0% 0% 0% 0% 0% 0%
Total 100% 100% 100% 100% 100% 100% 100% 100%
Source: Beyen International Market Research, Niagara Falls, Ontario © TWICE 2003



YTD Ad Share (Jan-Sep)

2002 2003 %Chg.
0MB $192.47 $155.73 -19%
10GB $291.09 $241.57 -17%
128MB $167.22 $136.85 -18%
15GB $235.30 $331.14 41%
192MB $199.99 $0.00 -100%
20GB $355.42 $269.85 -24%
256MB $0.00 $192.55
30GB $0.00 $490.45
32MB $59.28 $57.17 -4%
340MB $238.72 $0.00 -100%
40GB $0.00 $299.98
5GB $348.10 $222.01 -36%
6GB $189.31 $119.99 -37%
64MB $108.92 $84.23 -23%
8MB $160.58 $0.00 -100%
YTD Ad SHARE (Jan-Sep)
2002 2003 % Chg.
0MB 8% 4% -4%
10GB 7% 10% 3%
128MB 11% 34% 23%
15GB 1% 5% 4%
192MB 0% 0% 0%
20GB 11% 9% -2%
256MB 0% 5% 5%
30GB 0% 2% 2%
32MB 24% 2% -22%
340MB 1% 0% -1%
40GB 0% 1% 1%
5GB 7% 0% -6%
6GB 1% 0% -1%
64MB 29% 29% -1%
8MB 1% 0% -1%



MP3 Advertised Prices, Ad Shares

(By type of MP3 player)

Avg. price - YTD Ad SHARE (Jan-Sep)
2002 2003 % Chg.
MP3 only $154.09 $167.92 9%
MP3/FM $260.86 $168.58 -35%
MP3/MP4/Voice $403.98
MP3/voice $203.44 $142.84 -30%
MP3/voice/FM $141.27 $166.77 18%
Total $165.98 $165.44 0%
Ad Share - YTD Ad Share (Jan-Sep)
2002 2003 % Pt. Change
MP3 only 76% 73% -3%
MP3/FM 8% 7% -1%
MP3/MP4/Voice 0% 1% 1%
MP3/voice 9% 16% 7%
MP3/voice/FM 7% 4% -3%
Source: Beyen International Market Research ©TWICE 2003



MP3 Brand Share

(By advertising frequency)

Avg. price - YTD Ad SHARE (Jan-Sep)
2002 2003 % Pt. Change
SONICBLUE 21% 11% -10%
RCA 8% 11% 3%
CREATIVE LABS 4% 13% 9%
APPLE 9% 10% 1%
SAMSUNG 12% 7% -5%
IRIVER 3% 10% 8%
ARCHOS 7% 7% 0%
PHILIPS 1% 9% 8%
CLASSIC 4% 4% 0%
DIGITAL RESRCH 7% 0% -6%
FIRST INT'L 4% 1% -3%
PANASONIC 3% 1% -1%
EVOLUTION 2% 1% -1%
BUSLINK 0% 2% 2%
NIKE/PHILIPS 2% 0% -2%
Source: Beyen International Market Research ©TWICE 2003