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Digital media player market to see explosive growth through 2011

Significant growth in digital media player shipments from Apple Inc. and other manufacturers is expected to continue for the foreseeable future, helped by the convergence of Internet connectivity and expanded content libraries.

The combined Portable Media Player (PMP) and MP3 player market represent one of the fastest-growing segments of the consumer electronics industry today, according to market research iSuppli, whose data estimates that unit shipments will more than double between 2005 and 2011.

The firm sees worldwide units climbing to 268.6 million in 2011, expanding at a Compound Annual Growth Rate of 13 percent from 128.7 million units in 2005. In total, player shipments for the current calendar year are expect to rise to 216.9 million units, up 21.8 percent from 178.1 million in 2006.

For its part, Apple in 2006 sold over 46.4 million iPods, which would give it an approximate 26 percent global share of the global digital media player market based on iSuppli's unit shipment totals. That's the same share reported for the Cupertino-based company back in 2005 by another market research firm, IDC.

Should Apple maintain its share going forward, it would stand to sell more than 56 million players in 2007 and nearly 70 million in 2011. At the same time, manufacturing revenue from digital media player production will reportedly rise to $21.5 billion by 2011.

"A major driving factor behind this growth is the fact that PMP/MP3 players take advantage of the Internet more than other consumer electronic devices, giving users the ability to quickly and easily sample, acquire and share media,” said Chris Crotty, senior analyst for consumer electronics at iSuppli.

iSuppli data

iSuppli data

Source: iSuppli

The analyst estimates that total number of Internet households and broadband subscribers worldwide will grow to 883 million and 507 million respectively by 2011. Because of this, he expects shipments of PMPs like iPhone and video iPods will grow faster than those of music-only MP3 players during the coming years — likely to account for more than 66 percent of PMP/MP3 unit shipments by 2011, up from a mere 4 percent in 2005.

Crotty noted that other catalysts for market expansion include growing catalogs of available content and component cost reductions that are making the players more affordable for consumers.

"In parallel with the rise in PMP/MP3 shipments is the expansion of the market for paid digital content used on these and other platforms," he said. "The worldwide broadband digital paid video market will expand to $4.5 billion in 2010, up from a meager $300 million in 2006."

iSuppli also forecasts the broadband music market to grow to $5 billion in revenue by 2010, up from $1.6 billion in 2006.