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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.
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 All information contained in China Sourcing Reports is the result of exclusive, ground-level and definitive research conducted by Global Sources' analysts. Companies featured in these reports may or may not be clients of Global Sources.
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