Demand for digital music to help manufacturers

Growing demand for digital music players and the soaring popularity of electronic entertainment devices will benefit domestic contract manufacturers, an industry watcher said yesterday.

"MP3 players have emerged while the personal digital assistant (PDA) market was eaten up by smartphones as handsets evolved," said George Wu (吳裕良), a research analyst with Primasia Securities Co.

"MP3 players will be able to play not only digital music but also films and be integrated with simple functions that PDAs can provide," Wu said.

The electronic gadgets providing entertainment are expected to do well in the market, while smartphones possessing the functions of both handsets and PDAs will become stronger, he added.

The market began to boom in the middle of last year due to the popularity of online music among young Internet users, media attention as well as promotions by upstream industry such as hard disc makers, according to a BenQ Corp (明基電通) official surnamed Wu.

"This is a hot market with great potential for growth in the next one or two years," Wu said. "This year's Cebit show displayed a number of solutions in this regard as well."

Eyeing the booming business for entertainment gadgets, BenQ made inroads to the market by launching a line of flash-based MP3 players, Joybee, in April last year.

Worldwide shipments of digital music players are expected to rise to 20 million units this year from 15 million units last year, according to market researcher International Data Corp (IDC).

The industry itself is even more upbeat, estimating the market will reach 40 million units this year, the BenQ official said.

In view of the brisk sale of digital music players worldwide, Dell Inc decided to showcase its upgraded entertainment devices in the second half of this year.

Dell is banking on the new product to compete with the market leader, Apple Computer Inc's iPod. Apple has sold more than 2 million units since the product's launch in 2002.

The Dell device, named JukeBox, is designed to be a multimedia player rather than simply an MP3 player, as it allows users to download and play films. It features a 3.5-inch thin film transistor liquid crystal display and a 1.8-inch hard disk.

The company reportedly outsourced its MP3 orders to Wistron Corp (緯創), Taiwan's third-largest notebook manufacturer on a contact basis. The first batch of the product is expected to be shipped in June.