Consumers go crazy for MP3 players

Will buy 10.8m of them this year

By Tony Smith • Get more from this author

Posted in Mobile, 22nd July 2004 09:41 GMT

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Apple's iPod will have grabbed a commanding quarter share of the portable digital music player market by the end of the year as consumers binge on the Flash and hard drive-based devices.

So claims UK market watcher Informa Media, which yesterday claimed consumers will buy 10.8m players this year.

That represents a doubling of the market, which will have gained a total installed base of 21.5m units worldwide by the end of 2004.

Apple will go into 2005 with an installed base of over 5m iPod owners, the company forecasts, 23.5 per cent of the total.

Our own estimates, based on Apple's past quarterly results filings suggest Apple is well in its way to that target. We calculate that it shipped 1.32m iPods from launch to Q4 2003, and with the 733,000, 807,000 and 860,000 sold in 2004's first three fiscal quarters, it's installed base is now at 3.72m. That leaves it needing to sell 1.28m players by the end of 2004, or roughly 640,000 a quarter. Given current sales levels, it ought be able to manage that.

But while the consumer craze for hardware grows throughout the year, the prognosis for online music services is less secure, reckons Informa.

The researcher believes that punters will concentrate on ripping their CD collections and transferring tracks to their players rather than buying downloads, at least in any significant volumes.

"It's great news for the actual manufacturers, but for the music companies at the moment it's not going to be an instant boom," Simon Dyson, an analyst with Informa, told Reuters. ®