updated 03:40 pm EST, Thu January 3, 2008
PMP Market Flat in 2008
This year will be the first that the world's dedicated portable media player market will show clear signs of having neared or reached its peak, according to a new study published by iSuppli. While growth in 2007 was already cooling off compared to the rush of early years, having edged 8 percent ahead year-over-year, 2008 will represent considerably slowed results. Predictions have sales income expanding by only 3.5 percent; the slowdown is expected to continue until at least 2011, where growth may be virtually non-existent at just 1 percent higher than it is today, according to the report. At least some of this can be attributed to lower-cost music players, which may sell in greater numbers but ultimately generate less revenue than in the past.
The majority of this chilling effect is because users are changing over to cellphones, iSuppli says. While few actively use the devices for media playback, the numbers of customers who rely on their cellphones for both calls and media duties is expected to increase sharply and take a significant portion of stand-alone media player sales in the process.
Although it may hurt the future prospects of the business, it may ultimately benefit those companies that corner the market, the study adds. Apple stands to gain the most as its commanding lead with the iPod will allow it a steady revenue stream while feeding on less successful companies whose stunted sales prospects force them to close or merge with others. The iPod maker potentially sits a comfortable position as it expands the iPhone's still-small user base and gains a lead over companies that are unable or unwilling to follow.
iSuppli has not published data detailing its forecasts for the growth of the media-capable phone market.