MP3 player sales to soar

The BBC's Lizo Mzimba with a portable MP3 player

Sales of MP3 players and other digital music-playing devices are set to shoot up over the next five years, thanks to better technology and falling prices.

Analysts expect 26 million devices playing electronically-stored music to be sold in 2005, compared with just 3.3 million in 2000, threatening the dominance of CDs.

Digital players can be used like a walkman, in a car or in the home - but can be smaller, lighter and the number of songs they can store will increase as technology improves.

At the moment, an average MP3 player costs about £150 and can store one hour of music. But as time goes on, prices will drop and the capacity will increase, making such devices more attractive.

More than three million players were sold in 2000

Digital jukeboxes, which let you store up to 150 CDs on one hard disk, are already becoming available.

They allow people to transfer their CD collection or download songs from the internet, store them in one place and carry them anywhere.

The biggest market will continue to be America - which will have 18 million sales in 2005 - but the market in the rest of the world will also grow, according to the report.

The current MP3 and Windows Media formats will still be the most common, but with others being developed.

Benefits

Bryan Ma, senior analyst with IDC, who compiled the report, says customers will soon begin to notice the benefits of digital players over CDs.

"Today's [digital] players can store half an hour to an hour of music, which is not a whole lot," he says.

"But we're seeing a lot of different types of emerging products based on alternative storage media that could store an entire music library.

"As volumes increase and storage prices drop, they will become cheaper."

He also says that these players will be incorporated into things where it had not previously been possible to play music.

Online alliance

"Expect to see some experimentation and some interesting and innovative ideas that people haven't thought of yet. Expect some fun gadgets and various types of devices."

It has recently been announced that major record labels AOL TimeWarner, Bertelsmann and EMI have agreed to set up a joint internet-based digital music selling service called MusicNet. For a fee, fans will be able to download songs by artists signed to the labels.

These developments may signal the demise of the dominant CD format - although technology companies are not giving up on the disc.

Sony and Philips have come up with a format called Super Audio CD that stores more music at better quality, and other companies are backing DVD-Audio discs.