MP3 Player Shipment to Reach 18M in 2005

Jupiter Research reported that U.S. shipments of MP3 players will grow 35% to 18.2 million in 2005 and maintain a compound annual growth rate of over 10% through 2010, reaching an installed base of56.1 million by then, up from 16.2 million in 2004. MP3 players will reach critical mass this year, fueling demand for digital music services and stores.

“Apple shows no signs of losing momentum,” said Michael Gartenberg, VP and Research Director at JupiterResearch. “The iPod is a consumer phenomenon. Apple dominates this sector and will dominate portable MP3 player growth over the medium term,” added Gartenberg. Mostly due to the iPod’s success, JupiterResearch has raised its near-term forecast, but projects that flash-based player shipments will surpass those of hard-drive models in 2007.

“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, VP and Senior Analyst at JupiterResearch. “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,” added Card.