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Consumer Electronics |
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China's MP3 Player Market Shrinks,
Automobile Applications The New Focus July 16, 2008 China's MP3 player shipments decline as well as the number of vendors. During the period of January through April 2008, MP3 player shipments were 1.8 million sets, down 38.2% over the same period in 2007, while revenues were 882 million Yuan, down 37.62% over the same period in 2007. Substitution by other product categories, such as portable media players (PMP) and music-capable mobile phones, contributed to MP3 players' decline.
Source: CCID Consulting, June 2008 Vendor concentration grew. Many smaller MP3 player vendors exited, as competition intensified in a shrinking market. Moreover, upstream materials and supplier costs grew, which put further pressure on vendor profits. Even as recent in 2007, there were more vendors than there are now. The top four vendor shipment share has grown, from 34.6% in 2006 to 43.9% in 2007. By January to April 2008, the top four vendors controlled 59.5% of China's MP3 (audio-only) player market. Even the top three vendors had just over half the market during this period.
Source: CCID Consulting, June 2008 1GB players became the mainstream, while 2GB demand increased. Prices continue to drop while capacity (and features) continues to increase. By the end of April 2008, shipment shares of the 256 MB and 512 MB segments further shrank, and these segments will be phased out. GB range players will be come the mainstream. 1 GB segment had steady growth, to a shipment share of over half, while 2 GB segment reached 13.72%. The Chinese consumer will demand ever more capacity and will focus eventually on the 4GB to 8GB range, as prices continue to decline.
Source: CCID Consulting, June 2008 Competition that is not just about price anymore. MP3 players are continuing to improve in capacity, functionality, and design. The audio-only category continues to shrink, but Samsung, OPPO and Apple continue to launch new and competitive products. They also have advantages branding, quality, and strong China channels. In the MP3 video category, Newman, RAmos and Aigo have focused on the screen, capacity, video formatting, China channels, and services to gain more market share. Overall, the competition has shifted from price to more comprehensive strengths that also include branding, product, and channels. Future markets will be in China's less urban regions. MP3 players are reaching as saturation point in China's more urban Tier 1 and 2 cities. Future, potential markets will be in the Central and Western regions of China, as well as Tier 3 and 4 cities. First time purchases from these areas will be a driver for growth, and channels are being gradually developed to support sales and service. MP3 automobile applications have potential for growth. With the significant rise in living standards of China's more urban regions, so has the growth of automobile ownership. Therefore, automobile applications for MP3 players will also grow rapidly, which started in 2006. As vendors look to new areas of growth, Newman and OPPO have launched automobile MP3 products to differentiate and gain market share. For more information Please contact us for these and other China-related data, information and products. Unless otherwise specified, all information provided is sourced from CCID Consulting. |
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