Booming Market for MP3 Players According to IDC’s Latest Forecast

FRAMINGHAM, MA. – September 21, 2004 – Compressed audio players – also known as MP3 players – are available in portable, home and automotive form factors and from major and minor consumer electronics manufacturers and PC vendors. Broad consumer acceptance of MP3 players is being driven by a variety of factors, including falling price points, the availability of music from legitimate online music services, and the integration of compressed audio support in a wide variety of digital devices, including DVD players and gaming devices. The worldwide compressed audio player market is booming, and is expected to reach nearly $58 billion in revenues by 2008, representing a five-year compound annual growth rate (CAGR) of 20%.

"Compressed audio players – also known as MP3 players – are coming into the mainstream as portable flash player prices fall and capacities rise, the iPod mini and other small form factor portable jukeboxes come to market, and more and more devices, including DVD players and gaming devices, support compressed audio as a secondary feature," says Susan Kevorkian, senior analyst, Consumer Markets. "New opportunities abound for chip vendors, device manufacturers and paid music service providers to guide mainstream music consumers into this rapidly evolving market."

Key developments in the worldwide and U.S. compressed audio player markets include:

– The worldwide portable flash player market exploded in 2003 and is expected to grow from 12.5 million units in 2003 to over 50 million units in 2008, fueled by falling flash memory costs and the availability of players at multiple storage capacities.

– Apple, which has been a portable jukebox market leader since introducing the iPod in late 2001 and iPod mini in early 2004, will see new competition in the portable jukebox player market during the forecast period from vendors offering devices based on 1.0in. and smaller hard drive form factors.

– The portable and home MP3 CD/MiniDisc player categories will grow only modestly during the forecast due to stagnating portable and home CD player markets, growing consumer awareness of and falling price points on portable flash and jukebox devices, and cannibalization by DVD players and DVRs of standalone home compressed audio players.

– The availability of subscription and pay-per-download paid music service providers (MSPs) will drive demand for compressed audio players by providing an exciting new source of music content for consumers and because paid MSPs are expected to partner with device manufacturers on consumer education and marketing programs.

– The "Other" category of devices that support compressed audio encoding and decoding as a secondary feature, such as DVD players, gaming devices, DVRs, and mobile phones, is expected to lead unit shipments and revenue for the overall compressed audio player market during the forecast period. These devices are also expected to represent competitive substitutes for audio-only devices.

This study, Worldwide Compressed Audio Player Forecast 2004-2008: MP3 Reaches Far and Wide (IDC #31811), provides an analysis and forecast of the worldwide and U.S. compressed audio player markets. The study has two central sections. The Situation Overview reviews current market trends and discusses recent developments in the market. The Future Outlook section outlines IDC's assumptions about market trends during the forecast period, and presents forecast data and analysis for the period 2003-2008.

To purchase this document, call IDC's sales hotline at 508-988-7988 or email

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at

All product and company names may be trademarks or registered trademarks of their respective holders.