Lower priced, higher capacity Internet music portables on display here at CES will help keep sellthrough on the fast track in 2003 following double-digit percentage gains in 2002.
Some of the gains, however, are coming at the expense of traditional headphone CD portables, some suppliers said.
At the show, Bantam, Sony and Samsung will launch their first 256MB flash-memory models, Samsung will introduce its first hard-drive (HD) portable, and other suppliers will expand the industry's selection of 128MB flash-memory portables and personal MP3-CD portables, more of which will play multiple compressed codecs, not just MP3.
Dealers will also find more Internet portables that do more than just play music. Panasonic and Archos, for example, will expand their selection of multifunction devices that play music and take digital pictures and digital video. Panasonic's two new models feature solid-state memory with built-in still/video camera, while Archos' devices feature hard drives and optional snap-on still camera and separate snap-on videocamera.
In other show developments:
Sony was expected to talk up plans to expand use of its ATRAC3 codec from MD-based and flash-memory headphone portables to headphone CD portables for the first time. The products were also expected to support MP3 and possibly other codecs. It wasn't certain whether the products would be displayed, however. The company already offers MP3-CD portables.
No suppliers were expected to introduce 3-inch MP3-CD headphone portables, which have not been very visible in brick-and-mortar stores, one supplier said. Philips is carrying over two models at an everyday $99 and $149. TDK and Aiwa exited the market in 2002, citing low demand.
Aiwa GM Eileen Toomey pointed out that larger dealers did not get behind the category because suppliers didn't aggressively advertise the products. The dealers "were concerned that consumers wouldn't understand it" and that a lot of sales floor explanation would be needed.
Some suppliers also claimed that many consumers don't understand that 3-inch discs can be played in 5-inch players.
This year's introductions will follow a gangbuster sales year. RCA estimated factory-level flash-memory growth at 100 percent in 2002 to 1.5 million units compared to a 70 percent increase in 2001. RCA estimated even faster HD sales growth in 2002 to 300,000 units.
Those numbers still are small, however, compared to estimated factory-level personal CD sales of about 17 million units, flat or down from 2001, the supplier said.
The bright spot in personal CD is the MP3-CD segment, which grew significantly in 2002 to an estimated 6 percent of total headphone CD sales, RCA said.
Plunging prices and additional capacity are driving sales, as well as the ubiquity of PCs in the home, suppliers contend. "Everything that's connected to a PC is increasingly popular this year, including digital cameras," said Daan Renssen, Philips' portable audio marketing director. Other factors driving sales include the popularity of file sharing and download services and growing broadband penetration, he said.
As for pricing, 64MB flash-memory models were promoted for as little as $49 in December with 128MB models promoted at $129 and 20GB HD models promoted at $249, retail ads show.
Here is more in-depth details about new flash/HD headphone portables by company:
Archos: The Irvine, Calif., peripherals supplier will introduce two new HD-based "hand-held multimedia entertainment centers" in the first half to complement an existing model. All feature 20GB drives.
All three models accept a dual-use digital-still-camera/MPEG-4 videocamera attachment. Still pictures and videos can be viewed on their color LCD screens or on an attached TV screen. They also incorporate MP3 encoding and decoding, voice recording, data-file storage, and PC and Mac compatibility.
The current model, available since July, is the Jukebox Multimedia 20, which accepts a dual-use 1.3-megapixel camera attachment and retails for a suggested $315, or $449 with camera module. The module is available separately at $99.95. Optional card readers can be used to offload images taken by a digital-still camera.
The new models, the 120 and 320, can be docked into a TV-top module for recording TV video. They also come with wired remote equipped with an FM tuner, whose audio can be recorded onto the HDs. Pricing was unavailable.
The 120 is due in first quarter to dealers and on the company's web site.
The step-up 320, due in the first half, boosts color-screen size to 3.8 inches and uses a 3.3-mexapixel camera attachment rather than the other models' 1.3-megapixel attachment. The attachment also boasts a built-in flash.
Another new product, available since October, is the $299-suggested 20GB Jukebox FM Recorder 20 with built-in FM tuner, ability to record FM stations, B/W LCD display, up to 12 hours of battery life on the internal lithium battery. It lacks the multimedia capabilities.
The company's first flash-memory portable, called Ondio, features FM tuner, MP3 encoder, 128MB built-in memory, Compact Flash slots, 12 hours of use on three AAA batteries and MP3 encoding. It's already available in stores and the Archos Web site at a suggested $149.95.
Bantam Interactive: The company's first 256MB solid-state portable and first hard-drive portables will debut. The 256MB model is the BA800 with MP3 and WMA playback, codec upgradability, SD memory card slot and 1.8-inch color LCD to display pictures transferred from a PC. It's available only on Bantam's Web site at $299.
The hard-drive models, due early this year on the Web site, retail for $229 for the 2GB model and $329 for the 5GB version. Both feature a built-in MP3 encoder and playback of MP3 and WMA files. Like any hard drive, it can be upgraded to support additional codecs and add digital rights management (DRM) technologies.
Creative Labs: A USB 2.0 version of its NOMAD Jukebox Zen is expected to be displayed at an estimated street price of $349 for January shipment.
Like the Zen that began shipping in late October at a street price of $299 after $50-mail-in rebate, it features 20GB HD, FireWire connectivity, WMA and MP3 decoding, and support of WMA's DRM, enabling it to play downloaded music from the Pressplay service. The new version's battery life has been extended to 14 hours from 12.
Another product, shipping since August, is the 1-ounce MuVo flash-memory player, available in 64MB or 128MB at street prices of $129 and $169, respectively. They play MP3 and WMA files. WMA DRM support wasn't confirmed at press time. A single AAA alkaline delivers 12 hours.
First International Digital: The company's iRock brand will include its first MP3-CD portable and second 128MB solid-state player, which is also the company's first solid-state player to support both MP3 and Windows Media Audio. It doesn't support WMA's DRM technology, however.
The CD portable, already available at a $99 everyday price, is called the BLiNG. It incorporates FM tuner, wired remote, built-in battery charger, three-line LCD screen to display ID3 tags, and 2-minute antishock memory (for MP3 playback).
The solid-state 128MB 730i plays MP3 and WMA files as well as multimedia MP3i files, which add pictures and text to standard MP3 files. The MP3i files are created on a PC using the supplied software. The 730i displays the pictures and text on its 128x64 LCD screen.
An SMC slot adds up to an additional 128MB of storage. It's PC- and Mac-compatible and delivers eight hours of playback time on a single AAA alkaline. Price and ship date weren't available.
The new 730i is currently scheduled to ship in volume on Feb. 1 for a street price of $149.99 compared with the current model's $129.
iRiver: The company's first 256MB flash-memory player, the $199-suggested iFP-190T, plays MP3, WMA, and ASF files, features voice recorder and FM tuner, and plays for 20 hours on a single AA battery. It's wearable, weighing only 1.12 ounces without battery. It's upgradable to support additional codecs and WMA's DRM.
Best Buy will carry this product in mid-January. It is already available on iRiverAmerica.com and Bestbuy.com.
Compared with an existing 128MB model with FM tuner, the 256MB model adds recording off the tuner.
Panasonic: Citing demand for its current model, the company will launch two new youth-oriented multifunction devices that combine solid-state MP3/AAC headphone music portable, voice recorder, digital still camera and MPEG-4 digital video camera. The $299-suggested SV-AV20 and $399 SV-AV30, which feature 2-inch color LCD screens, increase the frame rate to a maximum 15fps from the current model's 10fps to improve moving-picture quality. The AV30 also adds a docking station to play back video on a TV and to record TV video.
The 20 and 30 ship with 32MB and 64MB SD memory cards, respectively. The latter holds anywhere from 20 minutes to an hour of MPEG-4 video, depending on the frame rate selected.
The current model, the SV-AV10, ships with 64MB card at a suggested $399.
Other new flash-memory music portables will be introduced at the company's line show later this year for July shipment.
Philips: In solid-state portables, the company will again offer a Philips-only branded product after an absence of about a year. It will complement a pair of Nike/Philips co-branded models shipping since last September.
The new portable, the SA-220 at a suggested $129, ships in February with 64MB memory, FM tuner, voice recording, MP3 playback and codec upgradability. The co-branded models feature MP3 and WMA.
More solid-state models will be announced later in the year. The company said it's investigating personal hard-drive stereos.
RCA: A new 20GB Lyra personal jukebox is priced at a suggested $249, down from the current 20GB model's $299. The new model is smaller, adds USB 2.0 connection, and adds mp3PRO playback to the predecessor's MP3 and Windows Media Audio playback. It comes with car kit, USB cable, and AC adapter. Ship date was unavailable.
The unit might ship out of the box with support for the WMA DRM, making it possible for users of the Pressplay download service to transfer downloaded songs to the device. The current models don't support the WMA DRM.
Samsung: Five new flash-memory portables include the company's first 256MB models and first two with MP3 encoding built in. They're accompanied by the brand's first hard-drive portable, which also features MP3 encoding. All but the entry-level 64MB flash portable are firmware upgradable and play WMA files, not just MP3 files.
Previous Samsung portables supported the WMA DRM, but at press time, Samsung couldn't confirm that the new one would.
The 256MB model is priced at a suggested $229 and features FM tuner, MP3 encoding, voice recording and recording off the FM tuner, and built-in FM transmitter to play songs through a car stereo.
The 128MB models are priced at a suggested $159 and $179. The $159 model features voice recording. The $179 model adds FM tuner, MP3 encoding and FM tuner recording.
The 10GB hard drive, which retails for a suggested $429, incorporates built-in FM tuner, MP3 encoding, voice recording and rechargeable lithium battery offering 10 hours of battery life.
Sony: The company will replace its current solid-state Network Walkman with a smaller, higher capacity model incorporating 256MB built-in memory. It also features expansion slot for a Memory Stick Duo cards, which are half the size of traditional Memory Sticks and offer capacities up to 128MB. It's due in March-April. Additional details were unavailable.
The current $300 model ships with removable 128MB Memory Stick. Both use the Sony ATRAC3 codec, derived from the MiniDisc ATRAC format.
Toshiba: The company dropped its hard-drive portable, citing bad reviews and low demand because of price. The company does not plan to show a new model at CES.