BEIJING, Sept. 4 /Xinhua-PRNewswire/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China’s MP3/MP4 player market in 2008H1.
The sales volume of China’s MP3/PMP player market reached 3.07 million sets in 2008H1, down 39.19% year-on-year; sales revenue reached 1.99 billion Yuan in 2008H1, down 40.51% year-on-year. The player market passed the first half of the year in downslide with the MP3 player market being the worst hit sector.
Figure 1: Sales Volume and Growth of China’s MP3/PMP Market in 2008H1
http://www.ccidconsulting.com/upload/13763.jpg
Source: CCID Consulting, July 2008
In 2008H1, with China’s MP3 player market marching towards a smooth transition, growth of sales volume was negative. Amid decrease in manufacturing cost and intense competition, sales revenue had negative growth; for PMP players, the Olympic effect drives up steady development of the market.
Figure 2: Sales Volume and Growth of China’s MP3 Market in 2008H1
http://www.ccidconsulting.com/upload/13764.jpg
Source: CCID Consulting, July 2008
Figure 3: Sales Revenue and Growth of China’s MP3 Market in 2008H1
http://www.ccidconsulting.com/upload/13765.jpg
Source: CCID Consulting, July 2008
Figure 4: Sales Volume and Growth of China’s PMP Market in 2008H1
http://www.ccidconsulting.com/upload/13766.jpg
Source: CCID Consulting, July 2008
Figure 5: Sales Revenue and Growth of China’s PMP Market in 2008H1
http://www.ccidconsulting.com/upload/13767.jpg
Source: CCID Consulting, July 2008
Looking back to China’s MP3/PMP player market in 2008H1, there are five major characteristics:
Characteristic 1: Expansion in storage requirement for flash memory MP3s
Data from the successive six quarters in China’s MP3 market reviews that flash memory MP3 players are the most popular while HD MP3 quietly exits the market. In flash memory MP3 player field, 128M, 256M and 512M products gradually retire, and G capacity products rise as mainstream products. 1G products grow steadily, and 2G/4G products have increased significantly. Future trend will see more G capacity products, with 2G/4G being most popular while HD MP3 struggles with more 5G/6G products.
Table 1: Sales Volume Structure of China’s MP3 Market, 2007Q1-2008Q2
(By Capacity)
Type Memory 07,Q1 07,Q2 07,Q3 07,Q4 08,Q1 08,Q2
Flash-MP3
128M 0.13% 0.00% 0.00% 0.00% 0.00% 0.00%
256M 4.08% 2.10% 1.12% 0.88% 0.62% 0.15%
512M 22.63% 11.41% 10.44% 9.16% 7.02% 3.88%
1G 52.67% 50.24% 53.05% 55.66% 54.26% 47.67%
2G 10.06% 22.79% 22.58% 22.52% 25.91% 34.44%
4G 2.17% 5.09% 4.97% 4.99% 5.46% 7.14%
8G 0.34% 0.93% 1.01% 1.12% 1.07% 1.18%
Others 7.50% 7.05% 5.98% 5.23% 5.22% 5.24%
Total 99.58% 99.61% 99.15% 99.57% 99.57% 99.69%
HD-MP3
Total 0.42% 0.39% 0.85% 0.43% 0.43% 0.31%
Total 100% 100% 100% 100% 100% 100%
Source: CCID Consulting, July 2008
Characteristic 2: Middle-and Low-end MP3 Market most popular with less than 800 Yuan products account for over 90%
Viewing from successive six quarters in China’s MP3 market, middle-and low-end MP3 is the mainstream, with prices of less than 800 Yuan. Under 400 Yuan products account for 40%. Capacity of Middle-and low-end products’ expands as production costs decrease; middle-and high-end products are limited to international brands and a few Chinese brands. Lacking sufficient selling points, these products performed poorly in the market.
Table 2: Sales Volume Structure of China’s MP3 Market, 2007Q1-2008Q2
(By Price Segment)
Price Span 07,Q1 07,Q2 07,Q3 07,Q4 08,Q1 08,Q2
400 Yuan or
under 37.1% 46.7% 43.4% 43.6% 41.5% 44.4%
400-500 Yuan 30.1% 22.9% 23.6% 23.4% 24.7% 22.1%
500-800 Yuan 24.0% 22.1% 24.6% 23.5% 24.0% 23.7%
800-1000 Yuan 3.5% 2.9% 3.2% 4.4% 3.7% 3.3%
1000-1200 Yuan 2.7% 3.1% 2.3% 1.9% 2.3% 3.3%
1200-1500 Yuan 1.8% 1.7% 1.9% 2.4% 2.8% 2.7%
1500-2000 Yuan 0.6% 0.4% 0.5% 0.7% 0.8% 0.4%
2000-2500 Yuan 0.2% 0.2% 0.5% 0.1% 0.2% 0.1%
Total 100% 100% 100% 100% 100% 100%
Source: CCID Consulting, July 2008
Characteristic 3: Flash Memory PMP Player Surpasses HD PMP Player
Currently, in the MP3 player field, flash memory medium products account for 99% of the total market. In the PMP player field, most manufacturers favour flash memory. In 2008H1, the share of flash memory PMP products’ sales volume increased to 71.07% in June from 44.24% in Jan.
Table 4: Sales Volume Structure of China’s PMP Player Storage Medium,
Jan.-June, 2008
Jan. Feb. Mar. Apr. May June
Flash-PMP 44.24% 48.14% 48.34% 50.29% 53.44% 71.07%
HD-PMP 55.76% 51.86% 51.66% 49.71% 46.56% 28.93%
Total 100% 100% 100% 100% 100% 100%
Source: CCID Consulting, July 2008
Compared with HD, flash memory has advantages in longer battery life, smaller size and lower failure rate, but it has higher cost. With technical progress and flash memory application’s popularity, production and sales volume of flash memory grow rapidly and the cost of flash memory continues to decrease. 1G was the mainstream of flash memory PMP player in 2006, but now 2G and 4G have been widely applied. Some manufacturers even launch 8G products. Thus, flash memory medium player have sufficient capacity to support large capacity video contents. Advancements in Flash memory medium will bring down PMP player prices and drive development of the PMP player market.
Characteristic 4: PMP prices going downwards with HD-PMP Player decrease the most
Data from successive six quarters in China’s PMP market shows that, with the market entering steady development and brand concentration, prices of PMP products have gone down, which is also a result of the increase in market share by flash memory PMP players.
Figure 6: Price Trend of Different Storage Medium Products in China’s PMP Player Market, 2007Q1-208Q2
http://www.ccidconsulting.com/upload/13771.jpg
Source: CCID Consulting, July 2008
In terms of capacity, the price of 2G products have fallen the most over the last six quarters, while prices of mainstream capacity products, 1G, 4G and 8G products are steadily adjusting downwards. Decrease in prices led to new price leveling rods which now stand as 599 Yuan and 699 Yuan.
Figure 7: Price Trend of Major Capacity Products in China’s PMP Player Market, 2007Q1-2008Q2
http://www.ccidconsulting.com/upload/13772.jpg
Source: CCID Consulting, July 2008
CCID Consulting forecasts that China’s MP3/PMP market will have following six development trends in 2008H2:
MP3 Player
(1) MP3 Market Has Weak Growth
As for pure audio MP3 products, daintiness, fashion and acoustics are still major selling points in 2008H2. However, as pure audio player enters a latter stage of maturity, a small mass trend is more evident. Being marginalized by other electronic products that have more functions, such as PMP, music mobile phone and GPS, its market development is not optimistic in 2008H2.
As for video MP3, the brand pattern changed frequently in 2007, which became steady in 2008. In 2008H2, based on abundant product lines and price choices, and more mature brands, video MP3, especially large screen MP3 products still have certain market space, but its growth is not favorable in the future.
(2) The Whole Market Enters Comprehensive Strength Competing Age
With falling production costs and advances in technology, MP3 players are no longer the only product for people to enjoy music. Just like development courses of mobile phone and PC, MP3 has considerable progress in storage volume, function, appearance design and audiovisual capacities; what’s more, MP3 has segment trend. In segment market, although China’s pure audio MP3 market gradually shrinks, Samsung, Apple and OPPO continue to launch new products so as to cater for consumers’ demands. For these brands, because of many years of brand accumulation, high quality and steady channel, these products have steady presentation in the pure audio MP3 market. In video MP3 field, excluding these three brands, Newman, RAmos and Aigo pay more attention to screen, capacity, video format, channels and service so as to gain more market space. Obviously, the whole MP3 market has transferred from price war to comprehensive strength competition.
(3) Competition to Transfer to 3-4 Tier Cities and Central and Western Regions
Experiences form 2002 to 2007 show that MP3 players are saturated in China’s tier 1 and tier 2 cities, where growth is slowing down gradually. For the next few years the market will turn to central and western areas and tier 3 and tier 4 cities, and first time purchase will become the major impetus of MP3 development. Judging from terminal layout of dealers and manufacturers, the channel construction of these areas has been gradually improved, which will be the focus of terminal channel construction in the future.
PMP Player
(1) Olympic Games Will Initiate New Round Growth
The 2008 Beijing Olympic Games will push China’s PMP market to realize 40% growth in 2008H2.
(2) Further price reductions
Prices of consumer electronics products will continue to drop with technical progress, cost drop and competition.
In 2008H2, PMP players will become cheaper with the general application of main control chip. PMP players will experience a new round of upgrading: support of more audio-video formats, larger screen size, better visual effects, higher storage capacity and lower price, as brands continue to catch up with the latest developments.
(3) Marketing will focus on “the experience”
Price cut remains the most prominent selling point, adopted by many manufacturers. In the long run, brand communications will form differentiated competition advantage so as to continuously improve market performance.
In the 2008H1 China’s PMP player market, many Chinese and foreign manufacturers adopt various marketing means to launch new products. Other large second-line brand manufacturers construct their brand images through various forms so as to achieve considerable development and attract consumers’ attention. Product experiencing and consumers’ interaction have important strategic meaning to improve brand image.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.
Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.
For more information, please contact:
Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com
