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Ringing it up
Enderle raises a larger question about the future of digital music players in general. He believes that as more cell phones, such as those by Nokia, Sony Ericsson and Samsung, as well as Apple’s iPhone, incorporate music into mobiles, stand-alone players will be considered just another extra device to have to carry around.

“Right now, we’re probably at the early phases of what the PDA (personal digital assistant) market went through, when people suddenly realized that a lot of this stuff that they were using their PDA for, they could use their cell phones for,” he said.

“And folks pretty much stopped buying PDAs, and now the market is pretty devoid of those products. I think we’re at sort of the beginning of the same type of cycle with MP3 players, where people are increasingly discovering they can use their phones for something else, to listen to music, and no longer need an MP3 player.”

Enderle thinks it’s one of the reasons Apple created the iPhone. “It was their realization that this migration was coming, and so they wanted to make sure they had a product that people could move to that they built, as opposed to something like the Sony Ericsson Walkman phone, or another along those lines,” he said.

Kevorkian said worldwide, shipments of personal media players are expected to increase from 200 million in 2007 to more than 212 million this year,

Of that number, 51.9 million players will be sold in the U.S. Next year, U.S. sales are expected to reach 53 million units “before declining in 2010 to 51.7 million,” she said.

“Keep in mind that this is a pretty modest decline. That comes from an increasingly mature market, where more and more people who are the target market for personal media players may already own one,” and are not ready to move to a newer model.

She doesn’t think the cell phone will be replacing the digital music player any time soon.

“While there will certainly be consumers for whom an all-in-one device scenario is appealing, a handset isn’t optimized to be a primary multimedia player,” Kevorkian said.

“A handset has limited battery power and power management capabilities, and at the end of the day, it needs to be able to make a phone call. And if the user can’t do that because they’ve used up the battery playing music and watching videos, then the handset hasn’t done its job.”

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