Characteristics of China's MP3/PMP Market in 2008:
MP3 Continues to Decline, Steady Growth for PMP
Compared with 2007, the sales volume of MP3 market has declined significantly. In 2008Q1, the sales volume of MP3 players was down 25.3% year- on-year, the sales volume in 2008Q2 was down 50.3% year-on-year, and sales volume in 2008Q3 was down 53.4% year-on-year.
After a period of refulgence in 2003 and 2004, with factories going bankrupt in 2005 and industrial shrink in 2006, sales volume decreased sharply in 2007. The market has stepped into a decline phrase, a downslide trend is inevitable.
The largest sales volume happened in 2008Q1; 2008Q2 was the traditional off-season; Q3 was a traditional busy reason, but the market in 2008Q3 was down by 13.6%. July and August were the traditional promotion season, but affected by Olympic Games, and with competition from the PMP and mobile phones market, 2008Q3 recorded the worst sale through out the year.
Affected by the global financial crisis and China's economic development, China's PMP player industry in 2008 did not show rapid development.
In 2008, under a more stable market, with a balance in supply and demand, and fuelled by the Beijing Olympics, China's PMP player market showed steady development.
Judging from the past seven quarters, the middle-and low-end MP3s are still the mainstream in the market, with prices below 800 Yuan. The market share for MP3 with prices under 400 Yuan accounts for 41% of the market. The low-and middle-end products' capacity is improving amid falling prices; and as high-end products lack sufficient highlights, their market share decreases.
Flash Memory MP3 Player Leads the Market, 2G and 4G Products in Rapid Demand
Judging from the past seven quarters, flash memory MP3 players have absolute advantage, with HD MP3 players withdrawal from the market. For flash memory MP3s, 128M, 256M and 512M products gradually faded away in the competition, G capacity products are now leading the market. Among them, 1G products' sales volume are gradually showing a downward trend; 2G/4G products' sales volume has increased. In future market, 2G/4G products are the most likely to perform best.
Flash Memory PMP Player Under Spotlight
Flash memory products monopolize the MP3 player market, while for PMPs, flash memory medium quickly gained the attention of manufacturers. The market share of flash memory PMP products has increased to 87.8% in June.
Compared with HD, flash memory has longer battery life, smaller size, lower failure rate, but comes with higher cost. With technical progress and the popularity of flash memory applications, the cost of using flash memory as a medium continues to reduce. In 2006, 1G was the main stream of flash memory PMP player products, but currently, 2G and 4G are the most popular, and some manufacturers have launched 8G products. Flash medium players have sufficient capacity to support large capacity video content. Thus, flash memory medium has bright future, it will drive PMP player products' continuous price drop so as to drive PMP player market's development.
PMP Prices are Falling
Judging from seven quarters, with market's steady development and brand concentration, prices for PMP products' price has been falling continuously. The gradual expansion of the flash memory PMP player market drives the price drop in the whole PMP player market.
As for capacity, prices for 2G and 80G products have fallen significantly. Prices for 1G and 4G products have declined slightly.
Besides, new price benchmarks are appearing along market development. 599, 699 Yuan will be the new benchmarks for PMP players with different storage capacities.
PMP's Video Support Ability Strengthened
Improving IC technologies and smooth industrial supply chain lead to enhanced video format support abilities of PMP players. PMP players that support FLV, RMVB, and other popular online video formats are available at present.
Besides, PMP will no more be the only kind of audio and video player. Digital products are integrating more functions to satisfy consumers' diversified demand, by which digital products can extend product life cycles. As a platform, PMP can integrate functions such as TV-OUT, mobile TV, GPS vehicle navigation, PDA, wireless surfing, and digital photo frame.
CCID Consulting believes that development of MP3/PMP market will slow down due to global economic crisis in the 4th quarter. However, the rising gift market is a positive factor to the PMP market. CCID Consulting forecasts that sales volume and revenue of China's MP3/PMP market will reach 1.34 million and 0.79 billion Yuan, respectively.
