MP3 Players: Sizing the Market
Apollo,
I thought it might be wise to take a look at the size of the market we are discussing. I haven't explored it in depth but although market estimates vary this is the way iSuppli sees the market and I'm reasonably sure they are just looking at standalone devices. I say that because Nokia alone will ship some 40 million phones this year with MP3 players but the majority of those units will not be audiophile quality or more properly stated perhaps, most will not approach the audio quality of the iPOD.
The MP3 Market (iSuppli)
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Units $$$ HDD Units HDD %
============ ============ ============ ======
2003 17.0 million $2.1 billion -
2004 36.8 million $4.6 billion 9.8 million 26.6%
2005E 57.7 million ? -
2009E 132.0 million $12.0 billion 56.2 million 42.6%
iSuppli notes:
• The MP3 player market mushroomed suddenly in 2004, with shipments rising 116 percent as hundreds of products arrived in response to the overwhelming success of Apple Computer Inc.'s iPod.
• While growth will slow in 2005, MP3 player shipments are slated to rise 57 percent from 36.8 million to 57.7 million, said iSuppli.
• Total MP3 player shipments will expand to 132 million units in 2009, rising at a compound annual growth rate (CAGR) of 29.1 percent from 36.8 million in 2004.
• HDD-based MP3 player shipments will grow at a CAGR of 41.8 percent from 2004 to 2009. Shipments will rise to 56.2 million units in 2009, up from 9.8 million in 2004.
• By 2009, iSuppli expects HDD-based products to account for nearly half of all MP3 shipments at 42.6 percent, up from 26.6 percent in 2004.
Market research firm Gartner estimates that worldwide MP3 player sales, which nearly tripled last year, from 14 million to 40 million units, should almost double again during 2005, to 75 million units (see chart, "MP3 Player Forecast," at link below). Many analysts expect Apple to sell 20 million of those units, up from 8.5 million in 2004.
reed-electronics.com
According to Dow Jones News, global shipments of MP3 players are expected to reach 35 million to 45 million units this year, and are forecast to rise to 55 million units in 2006 due to growth in demand for both flash memory and hard disk drive based products, a Samsung Electronics executive forecast recently.
Apple's fiscal year is the same as QUALCOMM's (ending September 31), but I backtracked Apple's iPOD sales by quarter for calendar year 2004:
• CQ1'04 (FQ2 2004) 807,000 iPod units shipped (909% increase from FQ2 2003)
• CQ2'04 (FQ3 2004) 860,000 iPods units shipped, representing a (183% increase FQ3 2003), bringing the total sold to about 2.8 million since the first model was introduced in October, 2001.
• CQ3'04 (FQ4 2004) Apple sold 2.016 million iPods, up 134% on FQ3's 860,000 total and 500% more than the year ago quarter. That takes the iPod grand total to just under 5.74m units
• CQ4'04 (FQ1 2005) iPod sales rose to 4.58 million units, up 525% year-over-year, raking in a total of $1.2 billion in revenue and bringing cumulative shipments to 10.32 million,
That totals 8.263 million iPOD units shipped in CY2004. Assuming that iSuppli's estimates are reasonable that makes Apple's market share of MP3 Players in CY2004 ~23% but much higher than that for units equipped with a hard drive and probably over 70%.
• CQ1'05 (FQ2 2005) Apple shipped over 5,311,000 iPods accounting for just over $1B in revenue (accounting for 31% of Apple's total revenue). This represents a 558% increase in unit shipments from the year-ago quarter, and a 284% surge in revenue.
It looks like there maybe an inventory glut at the moment so sales for CQ2 are estimated to be relatively flat.
Just some odds and ends, but I was curious about what size market we are looking at, and what estimates for market growth were. A preliminary observation is that hypergrowth may be over, or nearly over, both for the market (excluding converged devices) and for the iPOD.
Best,
- Eric - |
