Identification and definition of the global portable media player industry
A portable media player (PMP) is an electronic device that allows the owner to store, organize and play audio files as well as to view images and videos. The data is usually stored on a hard drive or a flash memory, enabling the storage of all kinds of files as on a USB flash drive. The PMP can be connected to a computer with a USB or FireWire connector, or via Bluetooth or Wi-Fi link. The worldwide leader on this industry is clearly Apple with the iPod (around 70% of market share in US). SanDisk is the direct challenger, even though it is far from catching up with Apple with around 17% of market share in US. Then come Creative, Microsoft and Samsung which together own around 10% of the US market. Finally we find a half-dozen of outsiders, as iRiver, Philips, Neonumeric, Archos, Sony, Meizu and Cowon, sharing the remaining 3% of the US market. It is difficult to have precise global figures but the US’ trend is representative of the global market; except in China where Apple is not the leader but second after Samsung. According to the Standard Industrial Classification, the PMPs belong to the household audio and video equipment industry (SIC 3651).
Origin of the industry
In the middle of 1998 appeared the first mass-produced Digital Audio Player (DAP: allowing the user to store, organize and play audio files only), the Eiger Labs MPMan. In 1999, Remote Solution sold the first hard drive based DAP, the Personal Jukebox-100. By the end of 2001, Apple commercialized its first iPod that was a DAP with a minimalistic user interface which allowed users to see the name of the band performing the current song as well as the name of the album. This interface was in black and white. In early July 2002, the first PMP was offered for sale: the Archos Jukebox. By the end of 2004, the first colour-screen was produced: the iPod photo and the iPod color. From this moment, the innovations in PMPs sped up. In early 2005, it was possible to view pictures and in October of the same year, one could watch movies on PMPs. The last innovations (September 2007) were the touch-sensitive screen and the access to the Internet via a Wi-Fi connection.
Location of industry
The creators of the DAPs were concentrated in Korea. Apple and Archos, which are at the base of the PMPs creation, are American and French respectively.
Today, there still exist three regional clusters in the PMPs market: the Asian group (with Cowon, Creative, iRiver, Meizu, Samsung and Sony), the American group (with Apple, Microsoft and SanDisk) and the European group (with Archos and Neonumeric from France and Philips from the Netherlands).
As there are not a lot of competitors in this industry, it is not necessary for the companies to be close to the customers as the demand exceeds than the offer. This trend is not valid in China because people prefer to purchase local products and that is why Samsung is the leader on this market despite the global predominance of Apple.
However, it is important for the manufacturers to be located in high technology centres. That is why most of the competitors are operating from Korea, Japan, Singapore or California.
It is also important to highlight that all these companies basically manufacture computers (e.g. Apple) or mobile phones (e.g. Samsung) and they use the innovations discovered in these areas to improve their PMPs.
Players in the Industry
Apple, SanDisk, Creative, Microsoft and Samsung represent over 97% of the PMP industry. This is why I will only speak about these five companies as the players in this industry. |Players in the Portable Media Player Industry | | | |Apple...