Personal and portable audio – Portable profits

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It has been an interesting few years for the personal and portable audio market, with Apple’s iconic iPod paving the way for the success of the MP3 player, replacing CD and tape players as the music player of choice. The huge growth experienced in this area has now begun to level out as the market becomes saturated.
GfK’s David Lewis, account executive for consumer electronics, explains: “Since the substantial increase of the portable audio market in 2005 (Jan-Dec ’05 sales saw a value increase of 67% on Jan-Dec ’04), driven by the success of MP3/4 players, this market, like its MP3/MP4 sector, has slowly begun to level off.
“With the last 12 months’ sales in the portable audio market accounting for £940 million, the significant areas of value growth are the clock radio sector, courtesy of the introduction of DAB and MP3 docking capabilities, and the headphones market, where all types (in-ear etc) have enjoyed success”.
Along with the addition of MP3 capability and DAB functions, there are various other trends apparent in the portable, and particularly the personal, audio sectors.
Colin Crawford, director of marketing at Pure Digital, summarises: “One of the biggest influences has been that the market has moved into the mainstream, and as such there has been demand for simpler, easier to use products at an affordable price. On the other hand, more advanced users have been asking for more features, driving demand for iPod docking, EPGs, Intellitext and other features, all of which has allowed us to keep ASPs high for retailers”.
Video technology
According to Philips’ James Wilson, consumer marketing manager for Personal Infotainment, video playback and audio quality are becoming increasingly important to consumers. He explains: “Consumer research has indicated that most consumers are dissatisfied with MP3 sound quality but have no alternative. In response, Philips has introduced a new patented technology on its latest range of portable MP3 players. FullSound technology enhances the sound quality of MP3 tracks and is available in the new range”. He also goes on to explain that the explosion in popularity of social networking sites has seen a huge increase in easily accessible audio and video content.
The new range from Philips includes the SA23, SA32 and SA52 series, the latter of which has a video download function, AAC file playback, to cater for songs from iTunes, along with a set of noise reduction headphones.
Sarah Baird, marketing executive for digital media at LG, explains the importance of networking in the sector, stating: “Wireless networking has been a major influential factor within personal audio this year. Products are now available in the market that allow users to rip music and connect to the Internet, sending out the music wirelessly to different locations in the home”.
Several other manufacturers have also launched devices featuring wireless technology. For example, Samsung’s P2 MP3 player features a touch screen and wireless Bluetooth connectivity, while Sony’s latest model, the Walkman Wirefree MP3 player features wireless headphones.
There are several challenges when it comes to producing personal audio products with DAB capability. Roberts Radio’s chief executive Leslie Burrage explains: “Firstly, personal radios need to be small and compact, and this can prove difficult with inserting the DAB modules into these units. Secondly, the reception of these radios is only as good as the amount of transmitters available to you to receive the broadcast. Unlike FM, DAB currently has a limited number of transmitters around the UK, therefore reception can sometimes be a bit patchy. However DAB currently covers 85% of the country”.
Battery life can also be a sticking point, as Pure’s Colin Crawford points out, stating: “Battery life is always a concern in personal audio, but fortunately the work we have done as part of our EcoPlus range to reduce power consumption of our DAB processing pays dividends in the area, allowing us to deliver excellent battery life, along with built-in rechargeable batteries in both PocketDAB 1500 and Move”.
Intempo Digital’s answer to the challenges of incorporating DAB into personal audio is the iDAB – a gadget which clicks into the base of the iPod enabling the listener to receive DAB broadcasts. According to Gareth Thomas, product manager at Intempo, the iDAB is exclusive because it can be used in iPod speaker docks when at home, effectively turning them into a DAB radio.
Roberts also produces a similar product – the robi which instantly transforms an iPod into a personal DAB/FM radio. The manufacturer also benefits from its best-selling Sports DAB radio – the RD14 – which continues to be extremely popular.
Indie support
The portable audio sector continues to be a particularly successful area for independent retailers, with many manufacturers offering specially tailored support. For example, Roberts already produces poster material to support new products, and is also in the process of developing the trade section of its website. According to the maker, this will enable retailers to access product information prior to launch, see stock levels and promotional activity and place orders online.
Pure has recently revamped its pricing structure to help the independents and also has a range of other initiatives in the pipeline.
Future innovations
Intempo’s Gareth Thomas, predicts that wireless will be the next big trend in the sector explaining that: “With wireless music streaming becoming increasingly popular, we anticipate a greater demand for people to be able to access their music in this way while on the move. And this in turn is giving the customer more choice on how they listen to their music”.
Sarah Baird from LG thinks that digital rights could be a big issue for the personal audio sector. “The issue of audio content and the sharing of music for MP3 technology is still under debate. If the digital rights management is removed completely, the way in which people will be able to share their music will be vastly changed and could influence this sector greatly. This will only come if there is a collaborative call to action within the industry.”
It’s also likely that the convergence trend will continue with MP3 connectivity and DAB tuners being added to existing products, as has happened with the clock radio.
Improvements to battery life are also set to continue.

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