Portable audio products are inexpensive and ubiquitous, reflecting demand from active Americans to listen to their music when and where they want. Boomboxes and headphone stereos let you enjoy music at the beach, in the backyard or at a picnic. Headphone stereos also let you enjoy your tunes during your commute on public transportation, while working out or while hiking.

Consumer demand, however, is changing. The popularity of boomboxes and CD-equipped headphone stereos is waning while demand for compressed-music (MP3-type) headphone stereos is rising. Compressed-music portables use flash memory or tiny hard-disc drives (HDDs) to store music in such compressed audio formats as MP3, Windows Media Audio (WMA), or AAC, which is used by Apple.

Boombox Changes
Sales of battery-operated CD boomboxes have fallen for several years because consumers have switched to more powerful and increasingly affordable compact music systems, which operate solely on 110-volt household current. Consumers need battery operation to listen to music outside the house or at the beach, but most people use boomboxes for in-home listening, where battery operation isn't needed.

Although way down in sales and price over the years, boomboxes aren’t out. They’re embracing new technologies that could boost demand and average prices. In 2006, for example, consumers can buy the first boomboxes that store music in flash-memory like their MP3 headphone stereo counterparts. At least two companies will offer MP3 boomboxes, which will lack CD and cassette but feature radio at prices from around $79 to around $239 for a model one GB of flash memory.

In recent years, suppliers also have launched satellite-radio boomboxes in multiple forms. One type, available for several years, accepts a plug-in satellite-radio plug-and-play (PnP) tuner, which users can shuttle between home and car docking stations to hear satellite-radio programs in multiple venues without paying for more than one subscription, which is tied to an individual tuner. (See satellite-radio section for more details.)

Another type of satellite-radio boombox controls an optional palm-size satellite-radio tuner/antenna combination. Only one satellite-ready boombox was available in late 2005, but more are coming from additional suppliers in 2006 at prices down to around $99.

Suppliers hope new-technology boomboxes will help turn around a market that shrank 27 percent in factory-level volume to $193.5 million following another double-digit percentage drop in 2004, CEA statistics show.

Headphone CDs
After a few years of strong growth, factory-level dollar sales of CD-equipped headphone portables fell for the fourth consecutive year in 2005. Factory-level sales dropped  22 percent to $383 million on a much smaller four percent unit-sales decline to 13.4 million units.

In recent years, growth has been fueled in part by prices that fell below $10 during promotions, expanding the customer base to young teens and preteens. Sales also grew because antishock technologies and other design improvements greatly reduced the likelihood of mistracking, making them more practical for use when walking, hiking or working out. Suppliers also crammed in other new features to entice consumers. In recent years, many models have turned up with AM/FM tuners, TV-band receivers and weatherband receivers.

Those improvements, however, haven’t encouraged many consumers to forego MP3 players, whose advantages include smaller size and ability to play back hundreds of songs without carrying dozens of CDs wherever you go.

To counter the MP3 player’s storage-capacity advantage, many new headphone CD players at prices as low as $22 play CDs encoded with MP3- and WMA-format music files, effectively turning them into portable jukeboxes able to store hundreds of songs on a single disc. In 2002, only nine percent of headphone CDs sold at the factory level were capable of playing back one or more compressed-music formats, CEA said. But in 2005, that percentage grew to 39 percent, CEA statistics show.

Despite MP3’s migration into the headphone CD world, no one expects headphone CD sales to turn around any time soon. Today, matchbox-size MP3 players store more songs in flash memory than an MP3-encoded 650-MB or 700-MB CD, many display images taken by a digital camera, and many display videos transferred from a PC or recorded directly off a TV.

The CD, an early-1980s technology, may not survive the current decade – at least not in portable devices.