The personal audio sector has evolved at great speed over the last few years, with MP3 players cementing their place as the standard player of choice, fuelled by the phenomenal success of Apple’s iPod. As a result, sales of more traditional formats including cassette, CD and MiniDisc continue to fall. But as the MP3 player sector beings to become saturated, not to mention the inevitable affect of the current economic crisis, the market faces some tough times ahead.
Simon Foy, senior account manager at GfK retail and technology explains: “The total portable audio market declined by 4% during the last 12 months (April 08-April 09), but was still worth over £900million. Overall volumes were down by 8%, providing evidence that the average selling price for some of these categories is increasing”.
Despite declines in the overall market, there are several areas of growth within related product sectors, as manufacturers begin to include MP3 functionality on traditional products and consumers shop for accessories to get the most out of their personal audio players. GfK’s Foy comments: “The market for headphones has been performing consistently well and remains in growth for the latest year.
“For portable media players (MP3 an MP4 players), the move to video and higher capacity products has helped to increase overall average price to over £90 for one of these devices.
“The total docking station market, fusing together both static and portable products with docking functionality, continues to grow, with a value increase of 64% in the latest year. Much of the development in this sector has been in the audio system category with products combining docking with other features such as radio and CD.”
The way in which people consume music has changed rapidly in recent times, with the exponential increase in popularity of social networking and content sharing websites and downloadable music exerting a huge influence. The rise of online music streaming services, such as Spotify, also has implications for the audio market.
Johan Plasmans, European marketing manager for portable audio at Philips Consumer Lifestyle, comments: “Unquestionably, the explosion of social networking websites and the increased accessibility of audio and video content has resulted in a desire from consumers to be able to share and view content on the move.
“Consumers are also becoming less interested in buying and owning their music collection as music streaming services and easily accessible unlimited online music becomes increasingly attractive to consumers”.
One of the most notable trends in the MP3 sector is the emergence of several models with touchscreen controls. Samsung’s P3 sports a 3in LCD touchscreen, which offers 16:9 viewing of video and photos. Available with either 8 or 16GB of storage, the P3 features a Music Hot Touch Key which enables users to instantly access their favourite music features without needing to scroll though multiple menus. The gadget also includes a voice recorder, FM radio and can be paired with a Bluetooth phone to enable users to answer calls through the player. Sony has also recently launched the Walkman X Series touchscreen MP3 player (see Products to Watch, page 26).
Philips’ Johan Plasmans believes that excellent sound quality will become the key differentiating factor in 2009, explaining: “Research has also indicated that many of the consumers originally attracted by the convenience of MP3 are now placing a premium on sound quality. In response, Philips has included its patented technology FullSound on its latest range of portable MP3 players and has added superior quality headphones to all its 2009 models, including GoGear Opus and Ariaz”.
Roberts Radio’s chief executive Leslie Burrage explains the challenges facing DAB products in the personal audio sector, stating: “DAB is continually growing and developing. The risk of introducing DAB to the personal audio sector, however, is that the products still need to pick up a good signal for optimum performance. When we introduced the robi radio, an iPod plug that enables you to listen to DAB/FM radio and toggle through your personal music collection, we were sure to put it through thorough testing to ensure high performance quality. Also, because personal audio is also associated with travelling, this is another factor that needs to be taken into consideration when trying to introduce DAB”.
As well as personal DAB radios, digital radio manufacturers are also considering the personal audio market when designing their portable products. For example, Roberts Radio’s Sound 43 and Sound 53 digital sound systems both offer iPod docks, as does its iDream. Roberts also has plans to introduce more products which integrate iPod functions throughout the year. Also available from Pure is the Highway in-car DAB radio, which can be used with earphones to listen to DAB when on the move outside of the car. In addition, the manufacturer also has many products which include iPod/MP3 player connectivity, such as the i10 universal iPod dock. But, as Pure’s director of marketing, Colin Crawford points out: “Not everyone wants convergence: there is a solid demand for audio-only products such as the PocketDAB 150, whose sales are consistently strong”.
Anecdotal evidence suggests that many consumers are now using their MP3 players as their main source of music at home, either using dedicated docking stations, or simply plugging them into their existing sound system in order to save room taken up by cumbersome hi-fi equipment and CDs. As a result, docking stations are now available from a growing number of manufacturers. One such example is LG’s PC14 designer iPod docking station (see Products to Watch, page 26), which is also capable of playing CDs. An increasing number of brands, are also now including iPod/MP3 capability on their music systems, while still supporting CD, and in some cases cassette, playback.
One company which recognized the potential of the MP3 player accessory market several years ago is Griffin. The American accessories firm has recently released a new range of products designed for use with iPods and iPhones. The PowerJolt Reserve not only acts as an in-car charger, but also charges a detachable pocket-sized battery pack that can be used to provide extra battery hours for iPods. Other new models include the TuneFlex (see Products to Watch, p 26) and an updated version of the iTrip, which enables users to play their MP3 player through an FM radio.
While capitalizing on the MP3 revolution, the company hasn’t forgotten about more traditional formats such as cassettes, as marketing manager Jennifer Fisher explains, commenting: “These formats are certainly in decline, but Griffin continues to support the older technologies. For example, we offer a cassette adapter called DirectDeck that fulfils the need to play music in your car through a cassette-equipped stereo. There is still a customer need, so we continue to offer a solution”.
The headphones sector has also profited considerably from the good fortunes of the personal audio market. Many headphones supplied with MP3 players tend to be relatively low quality, so consumers look to upgrade them with superior products. Many manufacturers have designed products with this in mind, for example, JVC’s popular Gumy and Marshmallow headphones are available in colours which coordinate with the latest iPod nano and Shuffle models. They also come with a gold-plated connection plug that is compatible with the iPhone.
There are numerous manufacturers benefiting from the need for competent headphones to suit all needs such as the Headfunk brand from Path group, which is aimed at hip young consumers who want good-looking products at an affordable price. Meanwhile, specialist firms such
as Sennheiser offer headphones ranging from affordable in-ear designs such as the CX300-II Precision Range, to more high-end noise-cancelling products.
Personal audio is an ideal product area for independent retailers as the products don’t take up too much room, but can be easily demonstrated in store. Many manufacturers offer in-store marketing material to support these products. For example Roberts Radio offers a range of relevant marketing material, along with a website specifically designed for dealers. Likewise, Pure has a wide range of PoS material and counter top displays to help sell its products.
It’s certainly worth getting in touch with manufacturers’ sales reps to see what kind of in-store support they can offer to help display and demo their products in the most appealing way.