omniture

CCID Consulting: MP3/PMP Players' Economic Operation Status in 2008 and Development Trend in 2009

2008-12-08 20:37 1159

BEIJING, Dec. 8 /PRNewswire-Asia/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China's MP3/PMP market in 2008 and development trend in 2009.

After a few years of rapid development, currently, China's MP3 player market has entered a declining phrase, the number of brands has dropped sharply, with shrinking sales volume. After four years of cultivation, PMP player market is in development and expansion period, the number of brands is increasing, the competition in this market is heating up.

Judging from the market development in recent years, the sales volume of China's MP3/PMP player market in 2005 reached 6.46 million sets; the sales volume in 2006 reached 8.01million sets, up 24% year-on-year; the sales volume in 2007 reached 9.486 million sets, up 18.4% year-on-year. The sales volume is in upward momentum, but the growth rate slows down. In 2008, affected by external economic forces such as natural disasters and the global financial crisis, and under the competition with PSP and mobile phones, the MP3/PMP market performance has been unsatisfactory.

Characteristics of China's MP3/PMP Market in 2008:

MP3 Continues to Decline, Steady Growth for PMP

Compared with 2007, the sales volume of MP3 market has declined significantly. In 2008Q1, the sales volume of MP3 players was down 25.3% year-on-year, the sales volume in 2008Q2 was down 50.3% year-on-year, and sales volume in 2008Q3 was down 53.4% year-on-year.

After a period of refulgence in 2003 and 2004, with factories going bankrupt in 2005 and industrial shrink in 2006, sales volume decreased sharply in 2007. The market has stepped into a decline phrase, a downslide trend is inevitable.

Figure 1: Sales Volume and Year-on-Year Growth of China's MP3 Market in 2008

http://www.ccidconsulting.com/upload/14033.jpg

Source: CCID Consulting, Oct. 2008

The largest sales volume happened in 2008Q1; 2008Q2 was the traditional off-season; Q3 was a traditional busy reason, but the market in 2008Q3 was down by 13.6%. July and August were the traditional promotion season, but affected by Olympic Games, and with competition from the PMP and mobile phones market, 2008Q3 recorded the worst sale through out the year.

Figure 2: Sales Volume and Quarter-on-Quarter Growth Rate of China's MP3 Market in 2008

http://www.ccidconsulting.com/upload/14034.jpg

Source: CCID Consulting, Oct. 2008

Affected by the global financial crisis and China's economic development, China's PMP player industry in 2008 did not show rapid development.

Figure 3: Sales Volume and Year-on-Year Growth of China's PMP Market in 2008

http://www.ccidconsulting.com/upload/14035.jpg

Source: CCID Consulting, Oct. 2008

In 2008, under a more stable market, with a balance in supply and demand, and fuelled by the Beijing Olympics, China's PMP player market showed steady development.

Figure 4: Sales Volume and Quarter-on-Quarter Growth Rate of China's PMP Market in 2008

http://www.ccidconsulting.com/upload/14042.jpg

Source: CCID Consulting, Oct. 2008

Middle-and Low-end MP3 Market Occupy Absolute Brunt, the Share of MP3 with less than 800 Yuan Accounts for 90%

Judging from the past seven quarters, the middle-and low-end MP3s are still the mainstream in the market, with prices below 800 Yuan. The market share for MP3 with prices under 400 Yuan accounts for 41% of the market. The low-and middle-end products' capacity is improving amid falling prices; and as high-end products lack sufficient highlights, their market share decreases.

Table 1: Sales Volume Structure of China's MP3 Market, 2007Q1-2008Q3, (by Price Segments)

Price Segments 07,Q1 07,Q2 07,Q3 07,Q4 08,Q1 08,Q2 08,Q3

<400 Yuan 37.1% 46.7% 43.4% 43.6% 41.5% 44.4% 41.3%

400-500 Yuan 30.1% 22.9% 23.6% 23.4% 24.7% 22.1% 19.9%

501-800 Yuan 24.0% 22.1% 24.6% 23.5% 24.0% 23.7% 29.2%

801-1000 Yuan 3.5% 2.9% 3.2% 4.4% 3.7% 3.3% 3.0%

1001-1200 Yuan 2.7% 3.1% 2.3% 1.9% 2.3% 3.3% 2.3%

1201-1500 Yuan 1.8% 1.7% 1.9% 2.4% 2.8% 2.7% 3.3%

1501-2000Yuan 0.6% 0.4% 0.5% 0.7% 0.8% 0.4% 1.0%

2001-2500 Yuan 0.2% 0.2% 0.5% 0.1% 0.2% 0.1% 0.0%

Total 100% 100% 100% 100% 100% 100% 100%

Source: CCID Consulting, Oct. 2008

Flash Memory MP3 Player Leads the Market, 2G and 4G Products in Rapid Demand

Judging from the past seven quarters, flash memory MP3 players have absolute advantage, with HD MP3 players withdrawal from the market. For flash memory MP3s, 128M, 256M and 512M products gradually faded away in the competition, G capacity products are now leading the market. Among them, 1G products' sales volume are gradually showing a downward trend; 2G/4G products' sales volume has increased. In future market, 2G/4G products are the most likely to perform best.

Table 2: Sales Volume Structure of China's MP3 Market, 2007Q1-2008Q3,

(by Capacity)

Type Memory 07,Q1 07,Q2 07,Q3 07,Q4 08,Q1 08,Q2 08,Q3

Flash- 128M 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

MP3 256M 4.1% 2.1% 1.1% 0.9% 0.6% 0.2% 0.0%

512M 22.6% 11.4% 10.4% 9.2% 7.0% 3.9% 1.2%

1G 52.7% 50.2% 53.1% 55.7% 54.3% 47.7% 30.1%

2G 10.1% 22.8% 22.6% 22.5% 25.9% 34.4% 41.8%

4G 2.2% 5.1% 5.0% 5.0% 5.5% 7.1% 18.9%

8G 0.3% 0.9% 1.0% 1.1% 1.1% 1.2% 2.3%

Others 7.5% 7.1% 6.0% 5.2% 5.2% 5.2% 5.7%

Subtotal 99.6% 99.6% 99.2% 99.6% 99.6% 99.7% 100.0%

HD-MP3 Subtotal 0.4% 0.4% 0.8% 0.4% 0.4% 0.3% 0.0%

Total 100% 100% 100% 100% 100% 100% 100%

Source: CCID Consulting, Oct. 2008

Flash Memory PMP Player Under Spotlight

Flash memory products monopolize the MP3 player market, while for PMPs, flash memory medium quickly gained the attention of manufacturers. The market share of flash memory PMP products has increased to 87.8% in June.

Table 3: Sales Volume Structure of China's PMP Player Market, Jan.-Sep. 2008, (by Storage Medium)

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep.

Flash-PMP 44.2% 48.1% 48.3% 50.3% 53.4% 71.1% 71.5% 82.4% 87.8%

HD-PMP 55.8% 51.9% 51.7% 49.7% 46.6% 28.9% 28.5% 17.6% 12.2%

Total 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: CCID Consulting, Oct. 2008

Compared with HD, flash memory has longer battery life, smaller size, lower failure rate, but comes with higher cost. With technical progress and the popularity of flash memory applications, the cost of using flash memory as a medium continues to reduce. In 2006, 1G was the main stream of flash memory PMP player products, but currently, 2G and 4G are the most popular, and some manufacturers have launched 8G products. Flash medium players have sufficient capacity to support large capacity video content. Thus, flash memory medium has bright future, it will drive PMP player products' continuous price drop so as to drive PMP player market's development.

PMP Prices are Falling

Judging from seven quarters, with market's steady development and brand concentration, prices for PMP products' price has been falling continuously. The gradual expansion of the flash memory PMP player market drives the price drop in the whole PMP player market.

Figure 5: Product Price Trend of China's PMP Player Market, 2007Q1-2008Q3 (by Storage Medium)

http://www.ccidconsulting.com/upload/14037.jpg

Source: CCID Consulting, Oct. 2008

As for capacity, prices for 2G and 80G products have fallen significantly. Prices for 1G and 4G products have declined slightly.

Besides, new price benchmarks are appearing along market development. 599, 699 Yuan will be the new benchmarks for PMP players with different storage capacities.

Figure 6: Product Price Trend of China's PMP Player Market, 2007Q1-2008Q3 (by Capacity)

http://www.ccidconsulting.com/upload/14040.jpg

Source: CCID Consulting, Oct. 2008

PMP's Video Support Ability Strengthened

Improving IC technologies and smooth industrial supply chain lead to enhanced video format support abilities of PMP players. PMP players that support FLV, RMVB, and other popular online video formats are available at present.

Besides, PMP will no more be the only kind of audio and video player. Digital products are integrating more functions to satisfy consumers' diversified demand, by which digital products can extend product life cycles. As a platform, PMP can integrate functions such as TV-OUT, mobile TV, GPS vehicle navigation, PDA, wireless surfing, and digital photo frame.

CCID Consulting believes that development of MP3/PMP market will slow down due to global economic crisis in the 4th quarter. However, the rising gift market is a positive factor to the PMP market. CCID Consulting forecasts that sales volume and revenue of China's MP3/PMP market will reach 1.34 million and 0.79 billion Yuan, respectively.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company's business scope has covered over 200 large and medium-sized cities in China.

Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting's customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.

For more information, please contact:

Cynthia Liu

Coordinating Manager

CCID Consulting Co., Ltd.

Tel: +86-10-8855-9080

Email: liuyan@ccidconsulting.com

Source: CCID Consulting Co., Ltd.
Related Stocks:
HongKong:8235
collection