consumer electronics personal audio
Music on the move
The personal audio sector shows signs of post-recession recovery although many fear that the MP3 market could be at a saturation point. However, there is plenty of innovation to keep consumers interested.
The personal audio sector has been completely transformed in recent years, with MP3 players and downloads taking over from tape and CD. Despite a tough couple of years, the sector is showing signs of recovery with sales volume up by 1.0% between January and December 2010 compared to the same period from the previous year. To put this in perspective, sales value dropped by 5.2% during the previous year when compared to the one before that. However, sales value was down slightly in 2010 (by 2.1%) thanks to average price declining by 3.1% Unsurprisingly, traditional formats have suffered as MP3 players continue to dominate, with CD players seeing the biggest downturn with sales volume decreasing by 34.1% and value down by 19.6%.
MP3 players make up the vast majority of unit sales in the personal audio sector, although their sales volume has actually decreased substantially over the last year, dropping by 17.3%, while sales value has gone down by a slightly less dramatic 6.4%, indicating that sales may be slowing down as the sector reaches saturation point. Just like the previous year, the only category that has seen any substantial growth is headphones, with sales increasing by 20.6% in volume and 23.2% in value. This is mainly down to the fact that the headphones supplied with many MP3 players tend to be relatively low quality, so that consumers tend to upgrade almost immediately. It’s also a market that does well from distress purchases as daily use tends to lead to a lot of lost or broken headphones.
£ Market trends
✔ Overall, the personal audio sector is gradually recovering from the recession, with sales volume up by 1% compared to the same period from the previous year, although sales value was down slightly (by 2.1%) thanks to average price declining by 3.1%.
Following the success of the iPhone and tablet devices, an increasing number of MP3 players now feature touchscreens. Sales volume of these products grew by a massive 48.4% since the previous year, with sales value going up by an equally impressive 46.8%. Most music players also
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✔ Like the previous year, the biggest decline is in the CD player sector, which fell by 34.1% in sales volume and 19.6% in value.
✔ Popularity of touchscreen continues to grow, with a 48.4% increase in sales volume and 46.8% in value.
✔ Overall MP3 player sales are down by 17.3% in volume and 6.4% in value.
✔ Headphones remain a big seller, with a 20.6% increase in volume and 23.2% in value.
26 BusinessBook2011
in association with GfK
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