MP3 Players to Reach Critical Mass in 2005

InformationWeek has an article up on a recent report stating that shipments of MP3 players tripled in 2004. The article also estimates that shipments in 2005 should increase by at least 35%, with a minimum 10% annual increase every year until at least 2010.

According to JupiterResearch analyst David Card the important number to reach for any new technology is somewhere around 15 to 20% of US households, at which point the critical mass will be enough to fully support growth in supplemental products and services based around that technology. According to Card, “MP3 players will hit that mark this year.”

Already we can see evidence of this phenomenon. Apple’s iPod has become an icon in the public’s eye and hundreds of companies are now producing accessories for the devices. Although Apple currently dominates the MP3 player field, the growth of the MP3 hardware industry over the last year has made it possible for a number of competitors, such as iriver and Creative to have their own levels of success as well.

The increase in MP3 hardware penetration in the average US household has also lead to the online music sales success of Apple’s iTunes. Again, while Apple dominates, the market is reaching the critical mass necessary to support a number of competitors, such as Yahoo’s Musicmatch, RealNetwork’s Rhapsody and the reinvention of Napster as a legal online music source.

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