As a result of over-crowded market conditions and intense competition, a handful of MP3 player vendors are expected to be forced out of the industry this year, industry watchers said.
"The high-margin era of the MP3 player industry has gone with too many vendors moving into the market, which results in declining retailing prices and larger memory storage," said Marty Kung (龔俊光), senior industry analyst at the research firm Market Intelligence Center (市場情報中心).
According to Kung, the low entry barrier into the MP3 player market has attracted a bunch of hardware vendors who have jumped onto the bandwagon. However, consumers are still making their purchase decisions based on pricing and storage sizes.
"As international players such as Apple Computer Inc have fashionable products with larger memory selling at competitive prices, there is little room left for local players. We suspect some will drop out of the competition this year, just as happened in the past," he added.
His comments reflected the fact that BenQ Corp (
The Joybee series from BenQ were once the top-selling MP3 players in the local market.
"BenQ is most probably banking on the potential of upcoming handsets bundled with an MP3 player feature, which might replace current pure MP3 players with storage of 1GB and less," said a research note released by the Topology Research Institute (
It was a smart move for BenQ to avoid the stiff MP3 player competition, and instead devote more resources to the development and marketing of its new MP3 player handsets, said the Taipei-based research house.
"To outwit rivals in the MP3 player market, vendors not only need to come up with gadgets with unique designs and fashionable related peripherals, they should also bear in mind that offering online digital music platforms will be the key to bringing in extra revenue," it said.
This is especially true of the successful Apple iPod series and iTunes online music store, as local consumers have not escaped from the global iPod craze either.
On a Sunday morning last September, hordes of fans lined up as early as 9am in front of the Shin Kong Mitsukoshi Department Store (
All 100 units of the gadget were snapped up shortly after the sale began at 3:30pm.
The iPod economy continues to flourish with accessories made specifically for iPods including fashion cases, headphones, armbands, speaker systems and car integration kits.
The latest example was when the Chrysler Group announced early this month that starting this spring, most of the Chrysler, Jeep and Dodge vehicles to be introduced this year will come with an optional integration support for iPods through the car's audio system.
The huge success of iPods has pressured other players' in the local market, including Taiwan's Micro-Star International Co (微星), Japan's Sony Corp, South Korea's MPIO and Singapore's Creative Technology Ltd.
But it seems that the tough MP3 player war has failed to deter newcomers from trying their luck, as both Kuro.com.tw (
With its first model "Kuro Neo," Kuro vows to capture 3 to 5 percent of the local market share by the end of this year.
"Our first product is a fashionable gadget designed by local design house DEM Inc (橙果), which makes it unique. We will expand into more product portfolios depending on the market's acceptance," said Jess Wu (
The company does not rule out the possibility of introducing more MP3 players or even MP3 player phones this year, he said.
Kuro is the nation's largest peer-to-peer file-sharing operator. Three of its executives were convicted by a local court of copyright infringement last year.
Kuro neo comes in a simple design with rims and earphones emitting lights. It has a built-in memory of 512MB and is expandable through a Secure Digital card.
Without a screen, the gadget offers black and white colors for selection.
"iPods have already eaten up some 40 percent of the local share and are making life tough for other makers. We knew that this would be a hard battle to win, but with our advantage of an online music software platform, we will stand a chance," he added.
In addition to selling its MP3 player on its Web site and PC Home Online (
something for nothing
There will be 300 units allocated for the first batch through 7-Elevens nationwide, and purchasers will be entitled to a free CD for the NT$3,888 (US$121) MP3 player, he added.
As for ViewSonic, the company is attempting to attract buyers' attention by unveiling two models in seven cheerful colors.
These models come with 512MB and 1GB storage with prices starting from NT$3,880 and NT$4,880 respectively.
The company is selling its MP3 players with a bird doll and loudspeaker as a package, which provides listeners with a "mini-MP3 player experience," said Mike Chiang (
"We are latecomers into the MP3 player market, and there is still a long road ahead to gain consumers' recognition," Chiang admitted.
The monitor maker hopes to enhance its product portfolio in the audio segment, as it already has established visual products such as liquid crystal display televisions and monitors, he added.
ViewSonic plans to introduce two more MP3 players in the first half of the year, fighting to secure up to a 5 percent share within the first year.
"There were around 1 million units of MP3 players sold in Taiwan last year and it will grow to 1.2 million units this year. As big players will not be able to eat up the entire market, we will still have a chance to grab a piece of the pie," Chiang said.