According to the latest report of CCID Consulting, in the first half of 2008, China's MP3 player market realized sales of about 2.5 million MP3 players and revenue of CNY1.223 billion, year-on-year decreases of 43.76% and 43.56%, respectively.
Li Ying, a consultant from the consumer electronics industry research center of CCID Consulting, says that as the MP3 player markets in big Chinese cities are close to saturation, a negative growth began to appear in its sales in the first six months of 2008. At the same time, because of the decline in manufacturing costs and the severe competition, its revenue also decreased compared with the same period last year.
The report shows that flash-based MP3 players took a major part of the market while harddrive type MP3s were withdrawing from the market. Of these flash-type MP3s, products with capacity of 128 megabytes, 256 megabytes and 512 megabytes will also be eliminated from the market. However, the sales of MP3s with capacity of 2 gigabytes and 4 gigabytes are expected to increase.
In the past six quarters, low and medium-end MP3 players with prices below CNY800 are the big winners in the market, of which MP3 players with prices below CNY400 took a market share of more than 40%.
The Beijing-based CCID Consulting says that the development of MP3 players will not be optimistic in the second half of 2008, because of the competition brought by replacement products such as PMP players and music-heavy mobile phones. In addition, after a sales boom from 2002 to 2007, the MP3 player markets in China's first and second-tier cities has now reached saturation. Therefore, rural areas and smaller cities in less-developed central and western regions will become the next promising markets for the future development of MP3 players.