April 13, 2005, 12:00 AM

Hot popularity of MP3 players will drive up digital music sales

Continuing to ride the momentum of Apple’s iPod, shipments of MP3 players will grow 35% this year to 18.2 million, pushing demand for digital music, Jupiter Research reported today.

 

Continuing to ride the momentum of Apple Computer Inc.’s iPod, shipments of MP3 players will grow 35% this year to 18.2 million from 13.5 million last year, pushing up demand for digital music, Jupiter Research reported today.

In its new report, “U.S. Portable Music Device Forecast, 2005-2010,” Jupiter predicts that MP3 shipments will grow at a compound annual rate of 10% through 2010, reaching an installed base of 56.1 million, up nearly 250% from 16.2 million in 2004.

"Historically, any new device or medium that reaches a U.S. household penetration of 15% to 20% creates a critical mass of customers for other products and services," said David Card, vice president and senior analyst at Jupiter Research. "MP3 players will hit that mark this year. This is good news for both digital download stores and subscription music services. Subscription services and devices will fuel each other`s growth."

Jupiter said it had raised its near-term forecast of MP3 shipments due largely to the success of Apple’s hard-drive iPod, but projects that shipments of flash-based MP3 players from Apple and other companies will surpass the traditional hard-drive MP3 players in 2007. Flash-based MP3 players have longer battery life and weigh less than hard-drive versions.

 

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