Data from the successive six quarters in China's MP3 market reviews that flash memory MP3 players are the most popular while HD MP3 quietly exits the market. In flash memory MP3 player field, 128M, 256M and 512M products gradually retire, and G capacity products rise as mainstream products. 1G products grow steadily, and 2G/4G products have increased significantly. Future trend will see more G capacity products, with 2G/4G being most popular while HD MP3 struggles with more 5G/6G products.
Viewing from successive six quarters in China's MP3 market, middle-and low-end MP3 is the mainstream, with prices of less than 800 Yuan. Under 400 Yuan products account for 40%. Capacity of Middle-and low-end products' expands as production costs decrease; middle-and high-end products are limited to international brands and a few Chinese brands. Lacking sufficient selling points, these products performed poorly in the market.
Currently, in the MP3 player field, flash memory medium products account for 99% of the total market. In the PMP player field, most manufacturers favour flash memory. In 2008H1, the share of flash memory PMP products' sales volume increased to 71.07% in June from 44.24% in Jan.
Compared with HD, flash memory has advantages in longer battery life, smaller size and lower failure rate, but it has higher cost. With technical progress and flash memory application's popularity, production and sales volume of flash memory grow rapidly and the cost of flash memory continues to decrease. 1G was the mainstream of flash memory PMP player in 2006, but now 2G and 4G have been widely applied. Some manufacturers even launch 8G products. Thus, flash memory medium player have sufficient capacity to support large capacity video contents. Advancements in Flash memory medium will bring down PMP player prices and drive development of the PMP player market.
Data from successive six quarters in China's PMP market shows that, with the market entering steady development and brand concentration, prices of PMP products have gone down, which is also a result of the increase in market share by flash memory PMP players.
In terms of capacity, the price of 2G products have fallen the most over the last six quarters, while prices of mainstream capacity products, 1G, 4G and 8G products are steadily adjusting downwards. Decrease in prices led to new price leveling rods which now stand as 599 Yuan and 699 Yuan. As for pure audio MP3 products, daintiness, fashion and acoustics are still major selling points in 2008H2. However, as pure audio player enters a latter stage of maturity, a small mass trend is more evident. Being marginalized by other electronic products that have more functions, such as PMP, music mobile phone and GPS, its market development is not optimistic in 2008H2.
As for video MP3, the brand pattern changed frequently in 2007, which became steady in 2008. In 2008H2, based on abundant product lines and price choices, and more mature brands, video MP3, especially large screen MP3 products still have certain market space, but its growth is not favorable in the future.
With falling production costs and advances in technology, MP3 players are no longer the only product for people to enjoy music. Just like development courses of mobile phone and PC, MP3 has considerable progress in storage volume, function, appearance design and audiovisual capacities; what's more, MP3 has segment trend. In segment market, although China's pure audio MP3 market gradually shrinks, Samsung, Apple and OPPO continue to launch new products so as to cater for consumers' demands. For these brands, because of many years of brand accumulation, high quality and steady channel, these products have steady presentation in the pure audio MP3 market. In video MP3 field, excluding these three brands, Newman, Ramos and Aigo pay more attention to screen, capacity, video format, channels and service so as to gain more market space. Obviously, the whole MP3 market has transferred from price war to comprehensive strength competition.
Experiences form 2002 to 2007 show that MP3 players are saturated in China's tier 1 and tier 2 cities, where growth is slowing down gradually. For the next few years the market will turn to central and western areas and tier 3 and tier 4 cities, and first time purchase will become the major impetus of MP3 development. Judging from terminal layout of dealers and manufacturers, the channel construction of these areas has been gradually improved, which will be the focus of terminal channel construction in the future.
In 2008H2, PMP players will become cheaper with the general application of main control chip. PMP players will experience a new round of upgrading: support of more audio-video formats, larger screen size, better visual effects, higher storage capacity and lower price, as brands continue to catch up with the latest developments.
Price cut remains the most prominent selling point, adopted by many manufacturers. In the long run, brand communications will form differentiated competition advantage so as to continuously improve market performance.
In the 2008H1 China's PMP player market, many Chinese and foreign manufacturers adopt various marketing means to launch new products. Other large second-line brand manufacturers construct their brand images through various forms so as to achieve considerable development and attract consumers' attention. Product experiencing and consumers' interaction have important strategic meaning to improve brand image.
