Portable Audio
Portable audio products are ubiquitous, reflecting demand from active Americans to take their music with them. Boombox and headphone stereos let you enjoy music at the beach, at a picnic or in the back yard. Headphone stereos make the daily bus or train commute more tolerable.
Consumer demand, however, is changing. The popularity of boomboxes and CD-equipped headphone stereos is waning, but demand of compressed-music 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 or Windows Media Audio (WMA).
MP3 Is King:
In 2004, dollar sales of MP3-type headphone stereos exceeded headphone-CD sales for the first time since the first MP3 portable appeared in 1998. Factory-level sales of MP3 portables rose 204 percent in 2004 to $1.29 billion, according to CEA statistics, but sales of headphone CD players and headphone cassette players fell 32 percent to $616.8 million.
In 2004, MP3 growth was solely responsible for the second consecutive annual increase in total sales of battery-operated music portables, consisting of MP3 portables, headphone CD players, headphone cassette players and boomboxes but excluding voice recorders and home radios. Their combined sales rose 27.4 percent to a factory-level $2.18 billion, CEA statistics show.
Sales of boomboxes, headphone CD players and headphone cassette players have fallen to the point that MP3 portables accounted for 59.2 percent of total factory-level sales of portable portable-music dollar volume in 2004, according to CEA’s statistics.
Boombox Bust:
Sales of battery-operated CD boomboxes have fallen for several years because consumers have switched to more powerful and increasingly affordable compact music systems. 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.
Factory-level boombox sales fell 27 percent in 2004 to a mere $270.1 million, CEA said.
Headphone CDs:
After a few years of strong growth, factory-level dollar sales of CD- and cassette-equipped headphone portables fell for the third consecutive year in 2004. Factory-level sales dropped an estimated 32 percent to $616.8 million because of declining wholesale prices and declining unit sales, CEA statistics show. Unit sales fell 17 percent in 2004 to 20.3 million units.
In recent years, growth was fueled in part by prices that fell below $10 during special promotions on low-end models, expanding the customer base to young teens and preteens. Sales also grew because anti-shock technologies and other design improvements that greatly reduced the likelihood of mistracking, making them more practical for use when walking, hiking or exercising.
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 weather band receivers.
To stay relevant in an MP3 era, many headphone CD players play CDs encoded with MP3- and WMA-format music files, effectively turning them into portable jukeboxes that store hundreds of songs. In 2002, 9 percent of headphone CDs sold at the factory level were capable of playing back one or more compressed-music formats, CEA said. But in 2004, that percentage grew to 49 percent, or 4.92 million headphone CDs.
Despite MP3’s migration into the headphone CD world, no one expects headphone CD sales to turn around any time soon.
