China, Socialism & Consumer Behavior: MP3 Player Sales Decreased 43.76% in the first half of 2008

According to the latest report of CCID Consulting, in the first half of 2008, China’s MP3 player market realized sales of about 2.5 million MP3 players and revenue of CNY1.223 billion (nearly 180 million US dollars), year-on-year decreases of 43.76% and 43.56%, respectively.

Li Ying, a consultant from the consumer electronics industry research center of CCID Consulting, says that as the MP3 player markets in big Chinese cities are close to saturation, a negative growth began to appear in its sales in the first six months of 2008. At the same time, because of the decline in manufacturing costs and the severe competition, its revenue also decreased compared with the same period last year.

The report shows that flash-based MP3 players took a major part of the market while harddrive type MP3s were withdrawing from the market. Of these flash-type MP3s, products with capacity of 128 megabytes, 256 megabytes and 512 megabytes will also be eliminated from the market. However, the sales of MP3s with capacity of 2 gigabytes and 4 gigabytes are expected to increase.

In the past six quarters, low and medium-end MP3 players with prices below CNY800 (around 120 US dollars) are the big winners in the market, of which MP3 players with prices below CNY400 (nearly 60 US dollares) took a market share of more than 40%.

The Beijing-based CCID Consulting says that the development of MP3 players will not be optimistic in the second half of 2008, because of the competition brought by replacement products such as PMP players and music-heavy mobile phones. In addition, after a sales boom from 2002 to 2007, the MP3 player markets in China’s first and second-tier cities has now reached saturation. Therefore, rural areas and smaller cities in less-developed central and western regions will become the next promising markets for the future development of MP3 players.

Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as Lead Product Design Strategist at SAP and promotes User Experience Design as visiting lecturer at Köln International School of Design. Working in the Information Technology industry since 1998, Itamar Medeiros has helped truly global companies in several countries (Argentina, Brazil, China, Germany, Hong Kong, India, Mexico, The Netherlands, Poland, United Arab Emirates, United States) create great user experience through advocating Design and Innovation principles. During his 7 years in China, he championed the User Experience Design discipline as User Experience Manager at Autodesk and Local Coordinator of the Interaction Design Association (IxDA) in Shanghai

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