With global shipments seeing up to 20 percent year-on-year growth rates, MP3 players are still a strong product line after about six years since it first entered mass production.
Today, Greater China manufacturers account for the bulk of MP3 players being produced worldwide. Mainland China, Hong Kong and Taiwan shared 52.21 percent of global production — with the mainland accounting for 23 percent, Hong Kong 18 percent, and Taiwan 9 percent — based on 2005 figures.
This report covers 54 MP3 player manufacturers: 32 from mainland China, nine from Taiwan, eight from Hong Kong, four from South Korea and one from Singapore. The aggregate 2005 MP3 player output of these companies reached 62.33 million units, or about 44.52 percent of global MP3 player shipments, in the same year.
Based on provided company data and research conducted by Global Sources, the findings of this report are:
• Flash-based models continue to dominate the MP3 player product line, showing no signs of relegating its position to HDD-based units in the next few years. Companies that produce both flash and HDD units allocate about 20 percent or less of the output to HDD types.
• The design trend is toward larger screens and more defined display types. The main types of display adopted by makers are dot-matrix LCD, TFT LCD, LTPS LCD, monochrome OLED and two-color- OLED. Sizes range from 0.6in to 3.5in.
• Flash MP3 players with 8GB up to 10GB storage capacity are being developed. Mainstream products come in 128MB to 2GB models.
• HDD-based players are available in 20GB up to 60GB versions.
• Smaller form factors and multifunction designs also continue to be popular. Units integrated with GPS and Wi-Fi will be available in 2007.
• The IPR issue is one of the biggest challenges for MP3 player makers in Asia. Makers with no licenses, such as that from Sisvel for MP3 and Microsoft for WMA, face legal risks in the EU countries. Another challenge is reducing production costs in order to release competitively priced products.
• To address these challenges, some makers are investing their R&D in vertical integration aiming to develop their own MP3 player components .The move will free the makers from licensing fees and reduce their production costs in the long run.
• In-house mold making and tooling capabilities are key differentiator processes in MP3 manufacture. Makers that have such advantage are more inclined to succeed in the highly competitive market.
The Industry Background section of this report provides insight on the industry In Asia and how the covered regions contribute to the global MP3 player supply in Asia. It identifies key production centers and describes the types of makers in these areas.
Industry Overview
The MP3 player industry remains strong, with forecast growth expected for several more years even as part of manufacturing and product development steadily moves toward the portable media player (PMP) line.
With higher production volume expected in 2006 than in 2005, Greater China manufacturers will continue to account for the bulk of MP3 players being produced worldwide. Based on the 140 million-unit global output data from In-Stat, the region consisting of mainland China, Hong Kong and Taiwan already represented more than 50 percent of global production.
In 2006, mainland China manufacturers expect their total output to reach 50 million units valued at US$1.3 billion, with 75 percent to 80 percent generated from exports. In the previous year, they shipped about 33 million units of MP3 players valued at US$970 million, representing 23.6 percent of the global output.
On the export scale, Hong Kong's total production that went overseas totaled 25.3 million units in 2005, accounting for 18 percent of the global output. From January to July 2006, Hong Kong's exports of MP3 players reached 12.45 million units.
Taiwan's shipments in 2006 are estimated at 14.8 million units, registering a 15.8 percent increase from 2005 production. The island's total output in 2005 was 12.8 million units, or 9 percent of the global production.
In South Korea, the MP3 player supplier base has shrunk as makers shift to other product lines. This has consequently lowered the region's share of the global market. South Korea, however, continues to make its presence felt in the high-end market as manufacturers focus R&D on technology and cosmetic designs. The region's production in 2005 totaled about 1.7 million units, or about 1 percent of the 140 million output worldwide.
Currently, MP3 player output is predominantly flash-based due to the memory's increasing capacity and decreasing cost. According to the Topology Research Institute, flash MP3 players account for about 66 percent of worldwide shipments and HDD-based units for 33 percent. This trend is expected to continue in the next few years.
Because of their higher storage capacity, HDD-based MP3 players are typically added with video handling capability. In mainland China, MP3 players with video function- or video MP3 players- are considered entry-level PMPs. Because of the lack of a clear distinction between MP3 players and PMPs, the mainland's Ministry of Information Industry is now working on a national industrial standard differentiating these products to be released in early 2007.
Supplier Profile
Bestlink Electronics Ltd
Established in 1992, Bestlink Electronics Ltd is a privately owned company that specializes in MP3 players. The line accounts for almost 100 percent of the company's revenue. The company also manufactures other electronic products such as DAB radios.
Bestlink Electronics considers its ability to launch several new products in a year to be its major advantage over other manufacturers. This strategy ensures that its products remain dynamic to reflect market trends.
The company exports all its products overseas. Western Europe is the main export market, representing about 75 percent of the maker's total revenue. South America and Eastern Europe each share 10 percent of sales, while the rest come from sales in the Middle East.
The maker's total annual output is divided almost evenly between OEM and ODM projects.
Bestlink Electronics makes it a point to attend major electronics trade shows in Hong Kong such as the Hong Kong Electronics Fair and the China Sourcing Fair.
Bestlink is affiliated with Bestlink Optoelectronics Ltd, a manufacturer of color LED-based electronic signs.
Manufacturing Capability
Except for mold making, plastic injection and SMT processes, Bestlink Electronics does all processes inhouse. Its four-story manufacturing facility in Shenzhen is about 40km from the Hong Kong-Shenzhen border, near the Lo Wu train station.
The factory occupies the second to the fourth floors of the building and has about 3,000sqm floor area and 500 employees.
The second floor houses the administrative offices, R&D area and warehouse for electronic components. The company's eight-staff IQC team is also stationed on this floor.
The factory has 12 production lines on the third floor, all dedicated to MP3 player production. There are two packing lines, four assembly lines, four soldering lines and two lines for software/firmware programming.
The fourth floor mainly serves as another warehouse for storing packaging material as well as finished products.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
If you'd like to order the China Sourcing Reports, please go to Global Sources website - http://www.globalsources.com, or click here. It is simply and convenient.