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Thursday, 12/18/2003 2:00:40 PM

Thursday, December 18, 2003 2:00:40 PM

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MP3 Players, Online Music Stores Expected To Be A Strong Holiday Combo
TechWeb News , 10-Dec-2003

Shipments of MP3 players are expected to nearly double this year, and continue growing by almost 50 percent a year for the next three years, a market research firm said Tuesday.

The number of units shipped by manufacturers in the U.S. is expected to be more than 3.5 million this year and exceed 26 million by 2006, market research firm Jupiter Research said. In three years, enough people are expected to have the digital music players to start driving online music sales.

In addition, Forrester found in a consumer survey that nearly 60 percent of people shopping for music players will look online for the holidays to take advantage of the Internet's convenience and the ability to mail gifts directly.

"They're not quite this season's DVD player, but portable music players, combined with online music stores and services, will be a strong holiday shopping combination," Jupiter analyst David Card said in a statement.

To lure shoppers, Internet retailers need to promote convenient shipping, competitive pricing and how customers can beat the holiday crowds by buying online. The survey found that these shoppers were less concerned about credit card security than average, but more worried about late arrivals and returns.

This year will likely see a half dozen new stores and services join existing players like America Online, MusicMatch, Napster, RealNetworks and Apple Computer's iTunes Store, which together with the Applie iPod player has energized the music industry.

Computer makers Dell and Gateway have already launched hard-drive-based players, joining previous entries from Philips and Toshiba, as well as from specialists like Creative Labs and Archos. Sony is expected to announce its plans for the space shortly, but Microsoft, Hewlett-Packard and Amazon.com will miss this season, Forrester said.

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