Scottsdale, Ariz. – Worldwide factory-level sales of compressed-music portables rose more than 200 percent in units and dollars in 2003 to hit more than 24 million units and more than $3 billion, In-Stat/MDR reported.
About 23 percent of U.S. households own compressed-music devices, which include devices that play music from flash-memory, hard drives, MiniDiscs or MP3-CDs.
In other findings, In-Stat, which along with TWICE is owned by Reed Business Information, said:
- Worldwide unit sales will grow at a compound annual growth rate of 16 percent between 2003-2008.
- Hard-drive portables sales will grow more than 100 percent in 2004 while the growth rate of flash-memory models slows.
- Many manufacturers are dropping out of the MP3-CD portable business because of shrinking margins. Nonetheless, MP3-CD sales in 2003 accounted for about 72 percent of all compressed-music portables sold worldwide at the factory level.
- Apple is on top with a 22-percent unit-sales share, exceeding its nearest competitor by more than 7 percent.
In-Stat also contended that authorized download services will need to lower prices from 99 cents per track and $9.99 per album to lure people from file-swapping services. "Users can now often find used CDs that are undamaged for less than $9.99," said analyst Cindy McCurley. She also contended that "due to the number of sites, they will have to find creative ways to differentiate themselves. Because there are or will be so many choices, there will likely be consolidation in the market in the next 12-18 months."