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iPod 'cool factor' sends digital-music player sales up 144 per cent
Manufacturers should 'keep it simple'

By Reuters

Published: Wednesday 16 March 2005

Sales of portable digital-music players are set to grow 57 per cent this year after more than doubling in 2004, results of a global survey showed on Tuesday.

Over the next five years, shipments of MP3 music players will expand from 36.8 million in 2004 to 132 million units in 2009, market research group iSuppli said.

Shipments of MP3 players - of which Apple's iPod is the best-known - rose by 116 per cent in 2004.

Most current media players use flash memory chips to store limited amounts of music, but there will be more players with higher storage capacity as a result of small built-in hard disk drives, or HDDs.

The research group said electronics producers stand to benefit from consumers' willingness to pay more for "cool" products, which Apple has exploited and which Sony is targeting with its new lineup of Walkmans.

"Initially, [Apple's] iPod was quite expensive, but the company reduced prices when the competition arrived," iSuppli said. "It also has aggressively introduced many generations of products in quick succession over the past four years."

The market research group warned companies not to try to squeeze too many features into their products.

"The so-called 'Swiss Army Knife' approach has not succeeded in the MP3 market," iSuppli said. "Simple, elegant products that perform a few functions with easy-to-use interfaces have sold well in the marketplace, while the do-everything approach has failed." Samsung Electronics is one company that adds many features to its products, such as a photo album and a radio. Apple has also brought out an iPod Photo with a colour display that doubles as a digital-photo album.

iSuppli did not publish market shares of the top players.