The digital audio market is poised for explosive growth, industry experts predicted yesterday.
According to analyst firm In-Stat/MDR, prospects for the sector are improving as online subscription services gain momentum, portable devices become more appealing and consumers become more interested in home jukeboxes and receivers.
The high-tech market research, Turning Up the Volume for Online Services, MP3 Players, and Digital Audio for the Home, predicted that worldwide portable digital music player unit shipments (including solid state, HDD, CD/MP3 and NetMD products) will rocket by about 500 per cent, from 6.8 million in 2002 to over 36 million in 2007.
Hard disk drive-based players are expected to experience the highest growth rate, but CD/MP3 players will have the highest volume of sales. The research predicts that they will account for around 22 per cent of all portable CD players incorporating MP3 technology in 2003.
But Cindy Wolf, analyst with In-Stat/MDR, said that there were still barriers to be overcome before this market reaches its potential.
"Although subscription services are offering some of what consumers are asking for [streaming, downloading, burning], issues related to service bundling, pricing and regulations remain," she said.
"These services will need to attract more subscribers in the coming year in order to continue to be a viable option for consumers."
Wolf added that although the home jukebox and receiver markets are still growing at a slow rate in terms of volume, increasing broadband penetration would push up sales.
"The increased penetration of broadband and home networking technologies and the ability to share content around the house will have a positive affect on this market," she said.
In-Stat/MDR predicts that home jukeboxes and receivers will experience their highest growth in 2004, but jukeboxes will continue to outperform receivers.
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