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Smartphones Heavily Decrease Sales of iPod, MP3 Players

By - Source: Business Insider | B 35 comments

MP3 player market sees share dropping by 22 percent year on year.

According to research firm Mintel, sales of MP3 players have dramatically decreased this year due to the emergence of smartphones.

Sales of MP3 players dropped by almost $177 million, or 22 percent, to $613 million this year when compared to figures from 2011. Mintel believes that sales will halve again by 2017. In its "worst case" scenario, it foresees that sales of MP3 players could decrease to $40 million within five years.

The popularity of smartphones, which performs the same functions and also offers the ability to make telephone calls, connect to the internet and access apps, in recent years (especially during 2012) has diminished the need for MP3 player functionality, which makes owning an iPod unnecessary.

By the autumn of 2010, around 275 million iPods had been sold globally. However, Samuel Gee, a technology analyst at Mintel, said that the decline in MP3 sales is "unlikely to reverse".

"It is impossible to talk about the current PMP market without extensive reference to smartphones. The devices have directly contributed to the sharp decline in the value of PMP sales."

He continued on to say that MP3 players are being "steadily outshone" by affordable new technologies including smartphones. Ian Fogg, a technology analyst at research company IHS, added that smartphones are becoming as popular as the iPod once was.

Apple recently confirmed that it had sold 5.3 million iPods globally within its most recent financial quarter, representing a decrease of 19 percent when compared to the same period in 2011.

"The convenience of a smartphone is greater than an MP3 player because it is always with someone. It also provides more choice of mobile music because someone can play back their own music – as they can on a MP3 player – but they can also access other music services like Last FM or Spotify. Therefore there is a greater choice of music available."

According to figures released in October, more than one billion smartphones have been purchased globally. Consulting firm Strategy Analytics said that increasing demand for smartphones is likely to increase that figure to over two billion within the next three years.

During the third quarter of 2012, smart-connected devices (PCs, smartphones and tablets) shipped 303.6 million units.

 

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Top Comments
  • 15 Hide
    joytech22 , December 31, 2012 3:04 AM
    Well considering everything nowdays plays MP3's and that phones themselves generally last a full day with normal usage (And can go for days just playing MP3's), why would anybody need anything else? It's just a pain to carry more than one device capable of the same thing.

  • 12 Hide
    wannabepro , December 31, 2012 3:11 AM
    Not surprised.
Other Comments
  • 15 Hide
    joytech22 , December 31, 2012 3:04 AM
    Well considering everything nowdays plays MP3's and that phones themselves generally last a full day with normal usage (And can go for days just playing MP3's), why would anybody need anything else? It's just a pain to carry more than one device capable of the same thing.

  • Display all 35 comments.
  • 12 Hide
    wannabepro , December 31, 2012 3:11 AM
    Not surprised.
  • -7 Hide
    velocityg4 , December 31, 2012 3:27 AM
    I never bothered with the iPod. Mainly because my last stereo car stereo was stolen and I never replaced it. I didn't have a car radio again until I got a new car five or six years later. I wasn't about to drop another $2,000 on a stereo.

    My iPhone was my first handheld MP3 player. Now that I've used it some for music in my car. It has made me want to get an iPod. I just hate it when I'm trying to listen to music and the playback gets interrupted my a ringing phone. So perhaps one day I'll buy one.

    Although I'm sure that the smartphone has had some effect. Perhaps there are some bigger factors. Such as people not having as much money in the current economy for such luxury items with no practical use just entertainment. Also I imagine that most interested in an MP3 player already own one. Why buy a new iPod when your sevem year old model plays the same music?
  • 5 Hide
    tanjo , December 31, 2012 3:51 AM
    Unless you have $10,000 worth of songs, it's pretty useless to buy high capacity MP3 players.
  • 2 Hide
    shikamaru31789 , December 31, 2012 4:59 AM
    This doesn't surprise me in the slightest.
  • 1 Hide
    rawoysters , December 31, 2012 5:39 AM
    I use a Shuffle for working out. I clip it on the back of my hat and wind the wires thru it.
  • 0 Hide
    reprotected , December 31, 2012 5:49 AM
    I still carry around a Sansa Clip Zip since the Galaxy S2 is installed with a really bad DAC.
  • 0 Hide
    cheesemon , December 31, 2012 5:51 AM
    Still use my mp3 player, an old Sansa that got new life thanks to Rockbox. I still haven't found a need for a cell phone, and I'm not sure I'd get one just for mp3s when a player costs much less. So I hope a few will still keep making mp3 players so I can still find a good one whenever mine expires. (And maybe there is hope for many more years, since Sony still makes portable CD players today. ;)  )
  • 2 Hide
    assasin32 , December 31, 2012 7:09 AM
    cheesemonStill use my mp3 player, an old Sansa that got new life thanks to Rockbox. I still haven't found a need for a cell phone, and I'm not sure I'd get one just for mp3s when a player costs much less. So I hope a few will still keep making mp3 players so I can still find a good one whenever mine expires. (And maybe there is hope for many more years, since Sony still makes portable CD players today. )


    Hmm kind of surprised there are still people who haven't found a use for a cell phone. I know where I live I can't even find a single pay phone. So it's either use a cell phone, try to borrow one from someone (friend/family/stranger), or hope the person at the nearest business will let you use theirs. I think my college even removed all payphones.
  • 0 Hide
    tydalwave , December 31, 2012 8:15 AM
    tanjoUnless you have $10,000 worth of songs, it's pretty useless to buy high capacity MP3 players.

    And that is the reason Xbox Music (previously known as Zune Pass) is the better option. My daughter uses the Zune HD and has almost 7000 songs on it, I have a WP8 (HTC 8x) with already 20 albums on it, all for only $9.99/mon. It boggles my mind to think people actually pay the $.99 per song, where $10 bucks gets you access to over 40 million songs and you get to keep 10 songs a month. So pretty much free music...
  • 1 Hide
    jn77 , December 31, 2012 11:44 AM
    The Ipod was an epic fail for me for a number of reasons.

    1. I bought an 80gb when it first came out and the micro drive skipped all the time so it got returned.
    2. I cannot use it as a mass storage device and copy my music library directly to it without hacking it.
    3. The battery life and ability for me as a user to get an extended battery does not exist.
    4. Flac Support (Not Aflac) but Flac support, seriously?
    5. no 128 or 256gb versions on the market. Infact a 512gb or 1TB might be nice since it is 2013 in less than 24 hours and IOS should support exfat for up to 2tb.
    6. No micro SDXC card slot. ( All devices should have at least 1, I would prefer 2 slots though)
    7. My galazy S3 has 32gb on board memory, 64gb in the card slot (96gb total) and does all of the above.
  • 0 Hide
    ajrm , December 31, 2012 12:28 PM
    Interesting stats .. but I still have not found a phone that can reproduce sound as well as a dedicated PMP,, the music on an Iphone sucks.. and that's apparently got the best DAC (Sound)
    .. My 4 gig Go Gear is still in Use.. planning on buying a Cowon Z2 Android PMP next week..

    Phones are good PMP;s only when quality of sound does not matter..
    the PMP is here to stay IMHO

  • 0 Hide
    CaedenV , December 31, 2012 12:49 PM
    tydalwaveAnd that is the reason Xbox Music (previously known as Zune Pass) is the better option. My daughter uses the Zune HD and has almost 7000 songs on it, I have a WP8 (HTC 8x) with already 20 albums on it, all for only $9.99/mon. It boggles my mind to think people actually pay the $.99 per song, where $10 bucks gets you access to over 40 million songs and you get to keep 10 songs a month. So pretty much free music...

    NOBODY pays 99 cents per song anymore. Amazon has tons of great MP3 CD's where you can get your 12 songs for $5. Or you can find people selling their CD collection with tons of CDs for $25-50, or if you are looking for a specific CD then there are lots of places selling CDs for a penny (plus $2.50 shipping). And then there are free services like iHeart Raido or Pandora which have a minimum of commercials, or if you want to skip the commercials then you pay $36 for a YEAR instead of $10 per Month, and iHeart Radio is similarly priced. Even those tied to the iEverything universe can get decent deals and sales from time to time.

    I picked up my Lumia 920 and there is no way on earth I would pay for the xbox music service with add-free Pandora for a year on the way and when I already have a rather extensive music collection that I paid very little for, plus all of the free podcasts available which will take a lifetime to get through.

    $10/mo for music these days is actually quite expensive.

    @article
    I somehow managed to skate through life without buying a dedicated MP3 player. Back in the day I had a CD player with MP3 support, and that sat in my car for years and years, and I still have it though I have not used it in 3-4 years. Then about 5 years ago I picked up a GPS which worked as my MP3 player, and just recently I got a smartphone that is my MP3 player. All of these devices were cheaper, had better build quality, and had better audio quality than iDevices of their generation. The only iPod that looked remotely appealing to me was the nano due to the nice tiny size of the device.
    Now a days you can get an iPod touch for just under $300... or you can get a high end smartphone for $450 which works as an mp3 player, e-reader, web device, GPS, phone, and (in my particular use) laptop.
    Of if you are on a contract you can get the phone for $50-100 up front, and then have a total cost of ownership of $600 with your cell phone plan (when compared to a similar non-contract plan where you have to purchase your phone without discount).

    The MP3 player market may still make sense for kids who do not yet have a phone, but once you have a cell phone (even one that is not a smartphone) there is little reason to tie yourself to the iUniverse, or have a dedicated device in general. Perhaps if they made an iPod touch with a real capacity (250-500GB) which works as a HD video device for all of your movies and streaming needs, and hooked up to your TV and could get terrestrial radio and TV then there would be a market for them... But as it stands now, the only people buying MP3 players are grandparents who are getting them for their kids and grandkids and don't realize that the device will never be used.
  • 1 Hide
    mydrrin , December 31, 2012 1:31 PM
    I would expect a drop of 10-15% per year for the next 10 years, in 10 years about $200 million and should stay stead around there. Some people will not want their children to have phones and an iPod will do just fine, they can text with the children in places with WiFi but gives them something worth $179 vs $650 in case they lose them. Also there will always be a market for small sub units that are only a player for jogging or the gym. To say $40 million in 5 years is ridiculous and doesn't see how people use them. In adults who don't do workouts, I would say this would be a good guess.
  • 0 Hide
    crewton , December 31, 2012 1:44 PM
    I used my ipod for putting all my music on and leaving it in my car so I didn't have to listen to the radio. I didn't know that ipods break under 32F :(  All my other devices work fine once you warm them back up but apparently apple doesn't.
  • 0 Hide
    LukeCWM , December 31, 2012 1:49 PM
    ajrmInteresting stats .. but I still have not found a phone that can reproduce sound as well as a dedicated PMP,, the music on an Iphone sucks.. and that's apparently got the best DAC (Sound) .. My 4 gig Go Gear is still in Use.. planning on buying a Cowon Z2 Android PMP next week.. Phones are good PMP;s only when quality of sound does not matter.. the PMP is here to stay IMHO


    I agree with you that the DACs in smartphones suck. But I'm not convinced that portable music players' DACs are significantly better. However, portable music players generally do have less junk noise sent through the headphones from other internal processes. Smartphones certainly are worse in that front.

    But you used the phrase yourself, "when quality of sound doesn't matter." For better or worse, I think that describes an incredible majority of mobile users. There are a few dedicated audiophiles that prize their portable systems with portable DACs and headphone amps, but for the rest of us, it just doesn't matter. (For fun, Google "Altoid Headphone Amplifier" to see what some are doing.)

    When I use portable sound, I really don't care that it isn't the supreme in fidelity: I just use my smartphone's headphone out into the best $18 in-ear headphones I've found. I'm either washing dishes or vacuuming or exercising, and fidelity isn't that important. But when I'm in front of my desktop computer, it's a completely different story: I use a dedicated asynchronous DAC and a dedicated headphone amp for some decent headphones.
  • 0 Hide
    burmese_dude , December 31, 2012 1:51 PM
    Fortunately, Walkmans aren't affected. Hoorayy.
  • 0 Hide
    InvalidError , December 31, 2012 2:04 PM
    mydrrinSome people will not want their children to have phones and an iPod will do just fine

    Considering that the "iPod" can do just about everything the iPad can do these days, Apple may as well re-brand them as iPad Micro/Nano.

    Considering the craptastic audio output and lack of SD slot on my Nexus7 and craptastic player (but ok-audio and SDHC slot) on my not-so-smart-phone, I can see why some people may want a dedicated no-compromise device. On the other hand, I'm already carrying two portable gadgets with me and can see why most people would prefer not to add a third with largely redundant functions.
  • 0 Hide
    hate machine , December 31, 2012 2:39 PM
    After spending 200-700 on a smartphone that can play mp3s why would you even shell out more than 15-20 bucks on a mp3 player. You can find tons ofr the borderline "disposable" 15-20 buck ones. Buying an iPod just seems silly.
  • 0 Hide
    jn77 , December 31, 2012 2:48 PM
    ajrmInteresting stats .. but I still have not found a phone that can reproduce sound as well as a dedicated PMP,, the music on an Iphone sucks.. and that's apparently got the best DAC (Sound) .. My 4 gig Go Gear is still in Use.. planning on buying a Cowon Z2 Android PMP next week.. Phones are good PMP;s only when quality of sound does not matter.. the PMP is here to stay IMHO



    I agree that the DAC used makes a big difference. I have been using Winamp to encode my MP3's from CD's for years (320kbps) and now I use it to re-rip the CD's I buy to flac (1000kbps +/-) and at least on the GS3 there is a night and day difference between the sound quality on the phones internal speaker.

    When I plug in the Shure noise cancelling ear buds, over the samsung ear buds, the difference is even more so (on the same GS3). Now its just a matter of getting some of those 2TB Micro SDXC memory cards that don't seem to exist yet to put a huge flac library on the phone.
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