MP3 Players Have Played Their Last Tune, Market In Decline

The European Information Technology Observatory (EITO) has reported that both turnover and the number of MP3 players sold in Europe will experience a double-digit fall.

According to current EITO forecasts, turnover and sales figures for these portable music players will both drop by 14% in the EU in 2010. The sale of around 28.6 million devices is expected to generate a turnover of 2.6 billion euro.

MP3 players are the perfect example of how quickly the market for high-tech products can change. Due to the increasing convergence in this area, an increasing number of devices, such as mobile phones, navigation devices, televisions or car radios, will be able to play back MP3 files.

The trend towards multi-function devices means the demand for MP3 players is dropping. Despite this drop in the number of sales, which is expected to continue in 2011, pure MP3 players will continue to hold a secure position in the consumer market. The demand for MP3 players reached its peak in 2007. During this year, 43.5 million devices were sold for 3.8 billion euro in the EU.

The largest individual market for MP3 players is Great Britain. But turnover is dropping there as well: by 22% to 630 million euro in 2010. The number of devices sold will fall by 20% to 5.5 million units. In Germany, turnover will shrink by 21% to 400 million euro in 2010 and the number of units sold by 15% to 5.7 million.

The market volume will drop by 17% to 320 million euro in France and the number of units sold by 16% to 3.7 million. In Italy, both turnover and sales figures will drop by 11% to 210 million euro and 2.3 million units. The market in Spain is somewhat more stable: turnover will drop by 6% to 170 million euro and the number of units sold by approximately 8% to 2.3 million.

The success story of the MP3 player began in September 1998, when the first MP3 ‚ player for the mass market was introduced, the ‘Rio Diamond PMP300“. The key advantage of the MP3 player was its storage technology. The MP3 compression format, which was primarily developed in Germany, resulted in much smaller data volumes without any appreciable loss in sound quality. These devices were also the first to utilise Flash technology, which is insusceptible to shock or vibrations, as the sound storage media.

Bruno Lamborghini is Vice chairman of Business Industry Advisory Committee to the OECD (BIAC) and President of the European Information Technology Observatory (EITO). An author of books and articles and a lecturer in Industrial Economics in various Italian Universities (Turin, Bologna and Milan), since 1994-95 Bruno has been a professor in the first course held in Italy on Information Society at the Catholic University in Milan.

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