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NPD: Increased Flash Memory Capacity Helping Drive MP3 Player Sales

PORT WASHINGTON, N.Y. — Increased memory capacity is helping drive up the price of portable digital music players, while devices sporting limited or imbedded memory are not only dropping in price, but falling out of favor with consumers, according to a study by NPD Intelect.

NPD found average selling prices of the players rising from $196 to $231, an 18 percent jump, November 2000 and February 2001. The increase was attributed to the players being bundled with higher capacity removable memory or using a miniature hard drive to store the music. Players with imbedded, non-upgradeable memory comprised only 4.1 percent of the players sold in February, compared with 17 percent last November. During that same period models sporting hard drives have almost doubled their share garnering over 8 percent of the market and those with both removable memory and an expansion slot have added between eight and 10 percentage points to their market share.

Jim Hirschberg, NPD’s director of consumer electronics, warned that despite this good news, vendors should be wary.

“In spite of the sales, there has to be a concern in the MP3 industry since the courts have effectively shut off the flow of free music downloads,” he said.

The NPD study also found online and brick and mortar customers differ when it comes to choosing their favorite digital music player. Online shoppers made the Creative Labs the market leader in web sales, while those shopping in traditional stores picked the S3 Rio. Hirschberg said the players are now the top selling consumer electronics category online.