CCID Consulting: China's Pure Audio MP3 Market Continues to Decrease, Foreign Brands Have the Advantage

CCID Consulting: China's Pure Audio MP3 Market Continues to Decrease, Foreign Brands Have the Advantage

BEIJING, Nov. 28 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China's pure audio MP3 market in 2007Q3.

The abundance and diversification of MP3 functions is the inevitable result of the market's development. The market leads the consumption. MP3s with limited functions would find itself in the position of a common walkman. MP3 players have become commonplace for the average consumer. However, pure audio MP3 players have been on the decline. CCID Consulting's latest data shows that China's pure audio MP3 market has continued to decrease in 2007Q3.

Based on its long-term investigation of China's MP3 industry, CCID Consulting released its Report on China's Pure Audio MP3 Player Market in 2007Q3. This report disclosed the current situation and development trends of the MP3 industry, which could be used to help enterprises make decisions on products, services and technologies.

The Market Continued to Shrink, Decreasing nearly 10% over 2007Q2

CCID Consulting's latest data shows the sales volume and sales revenue of China's pure audio MP3 market has had a downward trend in 2007Q2. The sales volume of China's pure audio MP3 was at 482 thousand sets, decreasing 9.57% over the course of 2007Q2, and the sales revenue of China's pure audio MP3 reached 0.24 billion Yuan, decreasing 14.29% over 2007Q2.

Table 1. The Sales of China's MP3 Player Market in 2007Q3

Time 2007Q3 2007Q2 Quarter-on-Quarter
Growth Rate
Sales Volume
(10,000 sets) 48.2 53.3 -9.57%

Time 2007Q3 2007Q2 Quarter-on-Quarter
Growth Rate
Sales Revenue
(a hundred
million Yuan) 2.4 2.75 -14.29%
Source: Oct. 2007, CCID Consulting

Profits Slim Down, Little Room for Price Reduction

The sales revenue of China's pure audio MP3 market descended 14.29% over 2007Q2. This also reveals that the profit room for pure audio MP3 has more and more slimmed down.

Manufacturers have adopted promotions and depreciated prices to sell MP3s during the summer vacation. However, in August 2007, price increases were popular in China's pure audio MP3 market. The main factors leading to price increases are as follows: First of all, the relationship between supply and demand changed. The tense supply of flash memory chips directly lead to demand outpacing supply and price increases ensued. Secondly, the slender profit margin from MP3 players drove manufacturers to initiate price increases in order to gain more profit.

The new functions of pure audio MP3 players have helped the technology and market to mature, leaving little room for price reduction.

High Market Concentration, Samsung Leading the Market

The first top five brands account for 53.59% of the total market in 2007Q3, up 3.53% over 2007Q2. The first five brands are Samsung, Apple, OPPO, UNIBIT and SONY. Aigo was not among the top five brands in 2007Q3. Among the top five brands, foreign brands accounted for 38.54%, more than 2.76% over 2007Q2. The data shows that foreign brands occupy absolute predominance in the pure audio MP3 market.

Depending on its excellent timbre, marketing activities and channel advantages, Samsung has expanded its leading advantage. Samsung accounted for 23.78% of the total market in 2007Q3, up 2.42% over 2007Q2.

OPPO accounted for 9.96% of the total market, up 0.9% over 2007Q2. OPPO had the maximal market share among China's brands and listed third place in the market. UNIBIT exceeded SONY and listed fourth place. Its market share was 5.08% in 2007Q3.

http://www.ccidconsulting.com/upload/12397.JPG

Source: Oct. 2007, CCID Consulting

The Market Will Continue to Shrink, Differentiation Key to Survival

In the face of an individuation consumption market, traditional MP3 players' growing space will be impacted immensely; the market will continue to shrink. The fourth quarter is the summit in the traditional gift market, which will promote the sales of MP3 players. However, considering the manufacturers' strategies, upstream sources' balance, the characteristics of the present market and user demands, CCID Consulting forecasts that the market in 2007Q4 will increase 5% over 2007Q3.

CCID Consulting considers that differentiation is the most important factor for brands in the furious battle for the market. The course of differentiation is the course of innovation. The key is looking for a niche to be filled in the market and mining the individual demands needed for it. Manufacturers will establish their competitive advantage via innovating brand value, product functions and value-added services. Foreign brands provide a good example: although the pure audio MP3 market is shrinking, Samsung and Apple are still launching their new products, which are the best at trying to satisfy consumers' demands. Differentiations have been proven to bring about a fruitful harvest.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as "CCID Consulting"), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is directly affiliated to the China Center for Information Industry Development (hereinafter known as "CCID Group"). Headquartered in Beijing, CCID Consulting has set up branch offices in Shanghai, Guangzhou, Shenzhen, and Harbin, with over 300 professional consultants and industry experts. The company's business covers over 200 large and medium-sized cities in China. Apart from home market development, CCID Consulting establishes international cooperation links across the United States, the Asia-Pacific region and Europe with agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas: powerful data channels, industrial resources, intense knowledge and a deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategic planning, IT applications, marketing strategies, human resources and information technology outsourcing. Customers range from industrial IT users, telecommunications companies, energy companies, finance companies, and automobile companies, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to be the number 1 consultant in strategic consulting, the number 1 brand for strategic consultancy, the number 1 advisor for enterprise management and the number 1 consultant for government decision-making.

For more information, please contact:

Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com

Source: CCID Consulting Co., Ltd.

CONTACT: Cynthia Liu, Coordinating Manager of CCID Consulting Co., Ltd.,
+86-10-8855-9080, or liuyan@ccidconsulting.com

Web Site:

http://www.ccidconsulting.com/upload/12397.JPG

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