All-in-one trend hits MP3 players
Makers of music devices follow path of cell phones, adding digital camera to dictionary
By Lee Chae-eun
The MP3 player, a youth favorite for music listening, is becoming more and more like a gadget for everything.
Following the manufacturing model for multitasking mobile phone, the makers of MP3 players are transforming their device into an all-purpose information tool. Apart for basic function of compressing and replaying Internet music file, the new models include a range of features, including digital photography and language study.
They are being released in a steady stream in what some analysts regard as valuable additions to Korea's electronics offerings to global markets.
ReignCom Inc.`s MP3 player "Prism Eye" has a built-in 30,000 pixel-resolution digital camera. ReignCom plans to release models with better picture quality this year to fend off LG Electronics Inc. and Samsung Electronics Co. [ReignCom Inc.]
"The MP3 player is expected to evolve into a handy entertainment device that forecasts the competition among Korean manufacturers that lead the international industry in flash-memory MP3 player" said an analyst at Samsung Securities. MP3 is an audio compression format for accessing Internet music files. Flash memory is computer storage that is not lost when power is turned off.
Last year, about 1 million MP3 players were sold in the world. This year, many manufacturers' forecast a 50 percent sales increase. Seoul-based ReignCom Ltd., the international leader in sales of flash-memory chip MP3 players, has a higher prediction - more than 2 million units.
ReignCom recently released a MP3 player with a digital camera. The Prism Eye model features zoom focusing and 300,000 pixel resolution, which means picture quality far lower than mainstream digital cameras that are 2 million to 3 million pixel.
"Prism eye supports more sophisticated photography than camera phones with equal resolution and is targeted at low resolution digital camera market," said Kim Dong-hwan, Reign.com public relations manager, adding that the company plans to roll out a MP3 player camera providing up to 1-million-pixel resolution before July.
ReignCom said it sold about 1.6 million units worldwide last year with 600,000 units sold in Korea. That gave the company commands a 25 percent global market share and 50 percent domestic market share.
ReignCom revenues nearly tripled in 2003, while its profit rose five-fold to $36 million. The company looks forward to a double in profit this year. Already the company announced a 158.5 percent increase in net sales this first quarter from same time last year.
There is no assurances the hot pace will continue. A clash with large conglomerates such as Samsung Electronics and LG Electronics is intensifying. In fact, MP3 player is one of a few areas where Samsung Electronics lags behind since 2002.
This year, the Samsung Electronics aims to unseat ReignCom releasing three new models earlier this year with at least one to come every month. Among them is Samsung's Yepp Sports YP-60, which tries to tap the "momjjiang," or "perfect body" fad with options that measure heart rate and total calories burned while working out and listening to music.
LG Electronics plans to launch its own line of MP3 players by the end of June. Until now, it has contracted other manufacturers to produce its line of MP3 players
LG Electronics and Samsung Electronics also pose a potential threat with their camera phones, which are capable of playing music. They already have unveiled 1-million pixel camera phones coming up with 2-million-pixel models in the first half of this year.
Industry analysts disagree about the extent of the threat. The sound quality of the camera phones is inferior and the handsets are capable of storing far fewer songs. Still, they provide the ultimate in all-in-one handheld electronics.
ReignCom CEO Yang Duk-jun remains nonplussed. He is confident the MP3 player can coexist with losing market share to ramped-up mobile phones. "Not even Samsung can worry us," said Yang.
"The competition does not trespass the boundary of MP3 player and MP3 phone," said Choi Yong-ho, LG Securities analyst "It does not mean that people will not buy MP3 player just because there is MP3 phone. It provides low music quality and little space," he said.
To help ensure growth, ReignCom has launched its first large-scale a TV advertising campaign. ReignCom is poised to benefit with unexpected luck.
In an effort to broaden its customer base from teenagers and those in their twenties to people of all ages, ReignCom will release a MP3 model, PMP-100, that has video recording capability, allowing users to download and watch movies and TV programs.
But the PMP-100 coincides with government encouragement of more TV-based education programs, to help relief the financial burden of parents sending their children to after-school classes.
Courses aired on EBS to prepare for college entrance examinations are expected to generate sales to high school students, making PMP-100 an unintended double winner in securing different age groups.
In another foray in combining music capability and education, ReignCom also will launch an MP3 player that boasts an electronic dictionary. The model is designed in cooperation with education publisher YBM SIsa.
Large music storage is another trend, starting with Apple's 'iPod' and Cowen Systems' s "iAUDIO M3." Both have 40GB capacity, that can save up to 5,000 songs.
(congcong82@heraldm.com
