Worldwide compressed audio player sales may reach $44bn by 2007, representing a five-year compound annual growth rate of 30 per cent.
According to market research by IDC, broad consumer acceptance and a diversity of form factors will combine to drive the market.
The analyst said that portable players based on flash memory and hard drives have captured the attention of both the media and digital music devotees.
But it is devices with compressed audio encoding and decoding as an additional feature that will drive future unit shipments and revenues.
The analyst believes this category will provide two-thirds of the overall revenues by 2007, some $28bn.
"The design and image associated with products like Rio portable flash players and Apple's iPod portable jukebox have done a great deal to spark popular interest in MP3 players," said Susan Kevorkian, senior analyst in IDC's Consumer Devices and Technologies research group.
"However, consumers buy music players because they want to listen to music, not simply because the device technology is cool or cutting-edge.
"Device pricing and features, consumer familiarity with device technology, and PC and internet access are key factors influencing MP3 player purchase decisions.
"Products like DVD players, game consoles and personal video recorders that offer consumers the added bonus of compressed audio support will be important drivers of the compressed audio player market during the forecast period."
The report found that the steadily declining cost per megabyte of flash memory will also help sales.
The site is perfectly situated for launching small satellites into orbit
Delegates at the ESOF 2018 conference were warned that their perceptions of the digital age were coloured by private industry
Concept vehicle uses gas turbine technology to generate electricity
Fresh from the notes of Ming-Chi Kuo of TF International Securities