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CCID: Innovation is key to audio MP3 market's survival

Posted: 05 Dec 2007 ?? ?Print Version ?Bookmark and Share

Keywords:pure audio MP3? flash memory? China MP3 market?

A new report by CCID Consulting found sales volume of China's pure audio MP3 in Q3 had slid 9.57 percent q-on-q with 482,000 units and sales revenue had dropped from $14.92 million to $3.2 million.

While manufacturers have adopted promotions and depreciated prices to sell MP3s, August brought price increases in China's pure audio MP3 market. Main factors that led to price increases included the tense supply of flash memory chips and the small profit margin from MP3 players that drove manufacturers to initiate price increases in order to gain more profit. In addition, new functions of pure audio MP3 players have helped the technology and market to mature, leaving little room for price reduction.

Foreign dominance
The first top five brands in China's pure audio MP3 market accounted for 53.59 percent of the total market in Q3, up 3.53 percent from the previous quarter. Of the top five brandsSamsung, Apple, OPPO, Unibit and Sonyforeign brands accounted for 38.54 percent, more than 2.76 percent over Q2, displaying predominance in the pure audio MP3 market.

Depending on its excellent timbre, marketing activities and channel advantages, Samsung has expanded its advantage, accounting for 23.78 percent of the total market in Q3, up 2.42 percent over Q2. OPPO accounted for 9.96 percent of the total market, up 0.9 percent over Q2. OPPO had the biggest market share among China's brands and listed third place in the market. Meanwhile, Unibit exceeded Sony and listed fourth place with 5.08 percent share in Q3.

Market turnaround
In the individuation consumption market, traditional MP3 players' growing space will be impacted immensely leaving it to continuously shrink. However, the holiday and gift-giving season in Q4 is expected to promote the sales of MP3 players. Given the manufacturers' strategies and upstream sources' balance, the characteristics of the present market and user demands, CCID forecasts that the market in Q4 will increase 5 percent over Q3.

CCID believes that differentiation and innovation are the most important factor for brands in the furious battle for the market. The key is looking for a niche to be filled in the market and mining the individual demands needed for it.

Local manufacturers will establish their competitive advantage via innovating brand value, product functions and value-added services. Foreign brands provide a good example: although the pure audio MP3 market is shrinking, Samsung and Apple are still launching their new products, which are the best at trying to satisfy consumers' demands.

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