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MP3
Flash Memory Demand Soars Past Expectations
Driven by unexpectedly strong demand, the worldwide
market for MP3 players -- which record music from the
Internet -- will reach 1.3 million units in 1999, according
to a new report by Cahners In-Stat Group. The report also
forecasts that the market for MP3 flash memory cards,
the recording media for MP3 players, will reach 5.2 million
units by the end of 1999. Robust demand for flash memory
cards is creating shortages.
"MP3 music mania is a global phenomenon that has pushed
the consumer electronics industry beyond its current manufacturing
limits," says Jesse Huffman, senior analyst with Cahners
In-Stat Group. Several firms have missed overseas shipments
due to a shortage of essential components. "There seems
to be an industry shortage of flash cards, decoder chips
and microcontrollers," Huffman says.
The United States is currently the largest MP3 manufacturing
region, with 600,000 units expected to be shipped in 1999.
Though the Diamond Rio, an MP3 player by Diamond MultiMedia,
has generated much of the industry excitement in the United
States, sales of other brands overseas are even more vigorous.
There are now over 40 MP3 players on the market with more
on the way.
South Korean manufacturers are aiming to export two million
MP3 units this year, but In-Stat forecasts that they won't
meet that target due to component shortages and financial
problems. The country is becoming an MP3 export powerhouse,
however, and will more likely export 300,000 units in
1999.
Japanese manufacturing has been slower to take off and
will not be ready for exporting until next year. Japanese
Internet audiophiles have not been slow to embrace MP3,
however. They will snap up 60 percent of Korean MP3 exports
in fall 1999 and North Americans will consume the bulk
of the rest, according to In-Stat forecasts.
Taiwan is lagging South Korea in manufacturing but will
grow rapidly in 2000. Europe has one MP3 manufacturer,
Pontis GmbH, which will manufacture 100,000 units in 1999.
The low cost of MP3 players will eventually spur manufacturing
in low cost labor countries such as China and Mexico.
It's a sure bet that MP3 sales will be strong in 2000,
with manufacturing striving to keep up with demand. Some
industry executives predict that worldwide shipments of
MP3 players will surpass digital camera shipments by 2001.
Report
Information
PC
audiophiles have embraced MP3 technology at a much quicker
rate than was originally estimated -- on a global basis.
While manufacturing in North America is currently the
largest base, South Korea is coming on strong. This report
contains a current listing of MP3 products available,
estimated 1999 unit shipment and flash content by memory
card format.
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