PMP Player Market Steps Up to the Expressway; Cost Reduction Becomes the Major Driving Force

CCID Consulting releases its 2007-2008 Annual Report on China's PMP Player Market. The report shows that China's consumers have accepted PMP players. With the rapid development of China's economy and the improvement of the PMP Player's technology and functions, China's PMP player market has stepped up to the expressway.

China's PMP player market has the following remarkable characteristics: abundant functions, cost reduction, large screens, large capability, and most especially, support to RMVB format and HDD-PMP, which are becoming the mainstream of the market.

Affected by the vigorous supply and demand, China's PMP player market has kept up its rapid development in 2007. The sales volume of China's PMP player market reached 1.212 million sets, up 129.1 percent over 2006; the sales revenue reached 2.26 billion Yuan, up 85.5 percent over 2006.

Brand concentration increased steadily

Brand concentration increased steadily and the competition was heating up in China's PMP player market in 2007. CR4 stayed in the market introduction stage in 2004. Major manufacturers began to deploy their strategy layout. Brand concentration was very high, CR4 accounted for 92.9 percent of the total market. China's PMP market entered its initial stage in 2005, and the market share of CR4 was 54% in 2005. China's MP3 player manufacturers tried their best to upgrade the brand concentration via price competition, thus the market share of CR4 accounted for 57.4 percent of the total market in 2006. In 2007, the manufacturers such as Aigo, Newsmy and ZARVA fully used their advantages to extend their market share. Thus the market share of CR4 accounted for 62.4 percent.

Products trends towards large screens

2.5" and 4.3" screens were the mainstream in China's PMP player market in 2007. HDD-PMP players focused on 4.3", whose sales volume accounted for 24.6 percent of the total market, and 4.3" screens became consumers' preferred screen size. Flash memory PMP players focused on 2.5" screens whose market share accounted for 18.2 percent.

In 2007, PMP players with 3.5" screens or larger accounted for 69.7 percent. This shows that products with larger screens have become the mainstream of the market.

Cost reduction becomes the major driving force

To a certain extent, PMP stands for the next stage of portable digital entertainment equipment. Many manufacturers accelerated production to launch relevant solutions and products. However, consumers have been greatly reduced due to the high price. With the competition heating up and the development of PMP products and functions, the cost reduction almost impacted China's and foreign manufacturers alike in 2007. Price competition became the major driving force in the PMP market in 2007. With the improvement of technology and functions, and the cooperation between manufacturers both upstream and downstream, the price of the PMP product will be reduced in the future.

80G HDD PMP Player became the most popular product in 2007.

The market share of flash memory PMP players with 256M or less storage capacity continually shrunk; its market share accounted for 1.1 percent. The 512M flash memory PMP player quit the market's mainstream with a market share which accounted for 1.5 percent. Because of reasonable prices, 1G flash memory PMP players accounted for 16.2 percent. 2G and 4G player prices will reduce and take the position currently belonging to 1G products.

In the HDD PMP player market, the market share of 20-80G players accounted for 65 percent. The market shares of different HDD capacities are close. Products with HDD capacity from 30G to 80G have the fastest growth rate. The rapid growth of the HDD PMP player benefited from richer product applications, more plentiful functions, lower prices and the supporting RMVB video format, which boosted consumers' thirst for high capacity PMP player products.

China's PMP player market entered a fast development period in 2007. More enterprises on the industry chain, from upstream PMP component providers to PMP player design companies and PMP terminal manufacturers, paid great attention to PMP market and a relative mature industry chain formed. Taking enterprises' market strategies, supply-demand balance of upstream resources, development of product technologies and functions, and characteristics of market demand into account, CCID Consulting believes that the compound growth rate of China's PMP player market will be up 34.5 percent and the CAGR of sales revenue will be about 18.7 percent.

As for technology trends, video decoding solutions will be diversiform, and hardware decoding will replace software decoding solutions. Excepting other technological innovations, PMP players will be more valuable since they have more plentiful functions. On the future market, functions such as PDA, gaming, DC/DV, DVB-T/DVB-TH digital TV, GPS navigation, WIFI wireless network, Bluetooth and so on, will improve product competitiveness greatly.