Connected MP3 Players offer revenue opportunity

The online content services market targeted at portable CE devices is poised for substantial growth over the next few years, particularly as more connected devices enter consumers‚ hands. IMS Research forecasts that online content purchases made by users of iPods and other portable media players (PMPs) will generate $37.1 billion in service revenues in 2015.

IMS Research estimates that in 2009, ad-hoc transactions initiated by MP3 player and video PMP users worldwide generated $9.4 billion dollars, and another $250 million resulted from subscriptions.

Anna Hunt, principal analyst at IMS, states, “CE manufacturers are no longer solely focusing on distributing devices but are expanding their solutions in personal entertainment in order to remain competitive and to monetise on the growing installed base of portable CE devices.” In addition to Apple's iTunes Store, several other leading PMP suppliers including Sony, Samsung, Aigo and Microsoft are already involved in online content distribution to portable CE devices including MP3 players and video PMPs.

Hunt adds, “What we've learned from Apple, as well as many of the MNOs offering music downloads to handsets, is that direct-to-device downloads allowing for quick and spontaneous purchases are becoming very popular with portable CE users. As connected video PMPs, such as the iPod Touch, become the norm over the next couple of years, we’ll see even more online services targeted at users of these products.”

IMS Research forecasts that half of the video PMPs shipping in 2015 will be connected, with WiFi being the most popular connectivity technology.

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