iPod tops 30 percent market share

Scottsdale (AZ) - Apple continues to expand its market share in the booming portable audio player market. According to a report released by market research firm In-Stat on Tuesday, Apple sold 8.4 million iPods in 2004 and captured a market share of more than 30 percent.

Apple’s iPod business model is running strong despite voices that have begun questioning the long-term success of the strategy. In-Stat reported that Apple sold nearly one third of all digital audio players in 2004. Of the 27.8 million-unit market, Apple’s iPod product line achieved a 30.2 percent share or 8.4 million sold units.

Apple blurs sales figures of the individual iPod products, so it was not clear how successful certain products are. According to recent media reports, for example on AppleInsider.com, iPod Shuffle sales are much slower than expected and are likely to even affect overall price levels of NAND Flash. Analysts at Goldman Sachs said that it expects sales for all iPods to be flat this quarter, other sources claim that sales are declining for the first time since the product’s introduction in 2001.

Stephanie Guza, an analyst with In-Stat, is more optimistic and expects that the market share of the iPod has climbed above the 30.2 percent level in the first half of 2005. According to Guza, Apple’s advantage is still the iPod brand. "What you see is a ’Kleenex’ effect. The iPod name is anonymous for portable player."

Guza said that the 2004 overall digital audio player market reached a volume of $4.5 billion - an increase of more than 200 percent over 2003 - with flash-based models driving unit sales, but more expensive harddrive players driving revenues. Increasing demand for Flash-players can be attributed to lower price points for Flash memory, according to Guza.

For 2005, In-Stat expects that 1 GByte capacity or greater Flash MP3 players will represent just over 20 percent of all Flash-based MP3 player shipments globally.