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MP3-players – global markets. Substitute devices

MP3-players – Global markets>>>

The pressure coming from so-called Music Phones is one of the determinants, guiding the development of the whole industry. Over this year, the situation has been aggravated (for MP3 players) due to numerous releases of individual cellular phones or even sub-brands, aimed exactly at the music playback.

The first dedicated music sub-brand on mobile handsets market – Sony Ericsson Walkman

Many have already taken the liberty of declaring victory of handsets, referring mainly to sale rates of music-centric phones, however such approach proves to be a mistake, as we cannot say with due confidence that everyone who buys a mobile phones with MP3 player onboard would purchase a dedicated MP3 player in case music-centric handsets were not available. Further more, if every handset had MP3 capabilities onboard, amount of such “Music Phones” would be enormous, to say the least, but at the same time that result would lead to nowhere.

A more impartial criterion is the way of purchasing audio content. Apparently, music bought via cellular operators’ service will be played back on handsets, while audio files acquired from online stores are more likely to end up being listened to on MP3-players. And even though a certain part of the latter tracks might be uploaded to mobile phones as well, the statistics doesn’t feature a couple of other means of obtaining compressed content for players, like Audio CD rips and p2p-networks. Thus such figures can be somewhat relied on - on a global scale the abovementioned proportion is somewhere around 60 to 40. In our point of view, it roughly displays the ratio between those going for handsets because of MP3 features onboard and people sticking with MP3-players.

The issue regarding possible replacement of MP3-players by music phones is quite complicated, so making forecasts here would be rather a waste of time. Slogans like “it’s better to have one device on hands rather than 10 at once” or “there is no way a handset would offer excellent sound quality” can’t be attributed to reliable criteria, it would be better to say, these are dogmatic subjective visions. Regrettably, I haven’t stumbled upon any in-depth analysis on consumer preferences in this field. That is why we just going to list arguments for and against getting a handset instead of a MP3-player.

Arguments for replacing a MP3-player with a music phone

A handset is familiar to a much wider audience than an MP3-player, thus its scope is far more extended and consequentially, the demand is higher as well.

Brands of Nokia, SonyEricsson, Motorola, Samsung, LG, in other words the handset market’s leaders, have much better reputation and are recognized by more people, unlike iriver, Creative trademarks, not to mention other small players; however there are some exceptions as well, namely Apple and Samsung, but on the other hand, an unsophisticated consumer outside the US might find himself at a loss when asked about Apple or iPod. And thus loyalty to an MP3-player, a products as a rule manufactured by an unknown company, suffers a lot.

All players constituting top 6 of handsets manufacturers are on the list of 100 most expensive brands (according to Interbrand), while the MP3 market delegated only two companies

As a device, MP3-player has no wide-known and stable image, due to enormous amount of designs, shapes preventing one from emerging. Therefore the broad masses don’t recognize it as an integral device and prefer thinking of it as something shapeless and vague. Such consumers readily accepts embodiment of MP3-player in a handset, which is famous for packing loads of features and being an all-round device.

Ranges of most MP3-players manufacturers is pretty limited, with positioning being diffused over various audiences, marketing, and segmentation of target audience for new models being left out either completely or at best partly. At the same time handsets are promoted by majority of manufacturers in an exactly opposite way.

Life time of audio-players, as a class, on the market has not been particularly long – less than 30 years, and thus they haven’t yet managed to become a part of human culture, transform into an essential part of day-to-day activities, therefore take-over by another type of portable device might go smooth and even not cause any psychology-related problems.

The first commercially significant portable audio-device is less than 30 years old (on the photo – Sony’s very first Walkman, by www.pocketcalculatorshow.com)

Aggregate resources of companies standing behind the market of handsets (manufacturers and operators) are many times bigger than those of MP3-players market, which allows them setting up massive advertising campaigns, embed cutting-edge technologies, and invest major funds into creation and development of high profile services. Most of MP3-players manufacturers are tiny companies distant from large-scale marketing campaigns and unable to significantly affect the market with advertising and PR. Innovations like hardware 3D accelerators, operating systems upgrades get materialized mainly on handsets, while the players end up being outsiders technology-wise.

Unlike stand-alone digital cameras that easily outdo their rivals embedded in handsets (which are inferior due to technical reasons concerning mirrors and lens), MP3-player can be integrated into a mobile phone at the same level of quality, since it’s nothing but a set of microchips. High-quality DAC, much storage, though-out bussing and well-written firmware for the main CPU will do the job and deliver excellent quality of a built-in player that would be able to match the best of its high profile rivals. The rest of things – display, battery, controls – are better on mobile phones, or at least equally good with players. Hence followers of “there is no way a handset would offer excellent sound quality” are stuck with no credible and reasonable arguments on their hands. On top that listening to music via earphones on street initially implies cruder sound quality.

MP3-player is only a set of microchips that can be incorporated into nearly any thing ï (handout of  ADC-DAC Wolfson for handsets)

A handset, in its today’s form, better fits the role of “portable entertainment centre”, unlike an MP3-player, for it packs video, games, entertaining applications, chat feature and Internet access apart from music. For youth, this makes mobile phone a more desired gadget than a player, further more, young people are keen on high-tech, new approaches and various powerhouses, that’s why owning a smartphone or communicator is better than having around “some player” for them.

Mobiles benefit from integration more as against stationary devices, as in living quarters there is more room for various gadgets, while the necessity to carry and manage a couple of devices at once might bring certain inconvenience.

Arguments against replacing a MP3-player with a music phone

So far there have been no examples of a multi-function devices taking over some adjacent market. In other words, a today’s PC is capable of replacing a TV set, audio-system and gaming console. Nevertheless all the abovementioned device keep on increasing their volumes of sales, while PC is nowhere near from taking hold of their market shares.

For the time being Media Center PC don’t pose a threat neither to home theater nor to home audio (on the photo - HP Media Center PC)

Consumers usually don’t have faith in quality of multi-purpose devices due to psychological factors: the entire modern civilization is based on specialization, and a cliche that a high profile specialist does much better than a “do-all” man is commonly accepted. So, many tend to apply the same paradigm to electronic devices, in particular they suppose MP3-players to have better sounding and layout of controls.

This allows making assumptions that the market of music phones will not go beyond the audience including people who would never buy a stand-alone player, as listening to music on the way to work etc. is not a key aspect. Perhaps, some of them, after getting to like the possibility to have favorite music with them everywhere, would want to get more quality and go for a tailored device. Similar situation can be seen on the market of digital cameras.

Demand for communication, being always online (handset) and listening to music on the way (player) are quite different in their very natures and rarely pop up simultaneously. Looking for a device that would serve his current needs, a consumer is more likely to go for a high profile device, as he expects to get more quality for a price lower than that for multi-function devices.

People, paying a lot of attention to their image and what others think of them, would rather get a couple of expensive specialized devices, not a do-it-all gadget. A set consisting of “the best handset”, “the best player” and “the best digital camera” should look grander than a single “the very best” device. We should not write off consumerism, that has taken over the modern society, when most consumers are simply fond of doing shopping, and the possibility to buy several fetching devices and then proper accessories that would appeal to their tastes, turns out to be a better way for them than purchasing a single device, if it’s capable of replacing everything else.

The technological progress today has gathered extremely high pace, which frighten an average consumer – multi-purpose devices have already become a thing to make fun of, thus this trend now seems ridiculous and unnecessary to many. Tailored devices, which are less complicated and more easy to use might be demanded by the more conservative audience that cannot or doesn’t want to keep up to date – today we see more consumers looking for a “thing-that-rings”, rather than a multi-purpose handset.

In terms of rationality and convenience, up-to-date multi-purpose gadgets sometimes get compared with knives like this one (on the photo – a knife by Wenger, by www.outdoorlife.com)

Furthermore, it’s easier to find the only fitting high profile device. An all-in-one device cannot appeal to each and everyone; on the contrary, many will definitely find numerous drawbacks, inconvenient features (from their point of view). A couple of specialized devices, maybe produced by different manufacturers and containing completely different concepts and peculiarities, have more chances to suit a consumer with certain needs.

MP3-players don’t bring any difficulties when owning a number of these devices at once, since there is no need in switching SIM-cards, transferring contacts, generally speaking, one can have a new player every day. Combined with compact dimensions, it allows them to perfectly go with various clothes and accessories. In this respect, a handset can hardly replace a player, as should one lose or have it broken, he will definitely get a lot of problems instantly.

Comparison of consumer-important specifications of players and handsets


In most cases, dimensions, as well as weight of an average player are 1,5-2 times better than those of a handset. Some players have already gone beyond the limit of miniaturization for handsets, at least for their present ways of operation and management.

MP3-players set up a record of their slimness back in 2003 (Etronics IM-3: 5 mm)

Nevertheless, the audience favoring smaller devices is not too wide - subminiature gadsets have quite limited success among consumers.

But since an owner of MP3-player will have to use a handset as well, in the end the prevalence in dimensions doesn’t make all the difference.

Mobile phone will hardly ever reach Mobiblu Cube Crystal’s dimensions (edge - 243 ìì3)


MP3-player benefits from having fewer controls (as it lacks a numeric keypad), strictly defined dedicated keys, more shortcut buttons for easier device management.

The shortcomings of MP3-players: necessity to manage two devices at a time, which brings certain difficulties, especially when you need to stop playback to answer a call. Vast variety of controls layouts creates problems on the way of mastering a new interface, when buying a device.

Click Wheel by Apple, Jog-dial by Creative, a unique wheel by Sony,joystick by iriver

Handset benefits from being a combined device, so that player and phone can be managed simultaneously, providing more or less the same controls layouts (as a rule mounted on the front of sliders and clamshells). Easy learning process for users doesn’t require relearning or getting into the way of handling device; numerous buttons allow for more flexible setup of shortcuts to player’s features.

The shortcomings of MP3-players: few dedicated keys for managing player on most devices.


MP3-players: high volume of onboard memory, topping out at 8 Gb for Flash-based models and 120 Gb for HDD. Expandable memory is a rare occasion – this feature is retained by less than 1% of devices, but in return they house slots for the most widely-spread SD/MMC and compatible formats with hot swap being enabled on all players.

Handsets: memory can be expanded on nearly all devices, but the formats are quite messy: SD, mini SD, micro SD, MMC, RS-MMC, DV RS-MMC, MMC mini, MMC micro, MS Pro Duo, MS M2 and so on. Top models as a rule make use of more expensive cards that can carry a little memory onboard.

New micro SD boasting high capacity (HC) don’t work with “outdated” device: such situation are stumbled upon by handsets users regularly

Volumes of built-in memory for handsets are usually slender, models running on a hard drive or with big Flash-based storages are uncommon for the market and as a rule are very expensive; capacious devices with 10+ Gb onboard are unavailable today, as the manufacturers consider them to be unclaimed. Although, it’s a disputable point of view, especially for the “Jukebox-country” – the US, but at any rate, starting from 2007 the situation is going to change for the better.

The whole trend is quite evident: while players offer more onboard memory, handsets arm users with possibility to extend default storages on their own. It has been confirmed that the former way is much more preferable for the broad audience that doesn’t want to go into additional expenses and bother themselves with memory cards at all. Thus, many buy the most capacious Flash memory card along with a new handset and keep on using it as internal storage till the handset breaks down. In terms of maximum possible capacity, mobile phones are far behind portable players, since even “outdated” SD/MMC cards are topping out at 4 Gb today, whereas some players feature 8 Gb Flash-based storage already. More usual mini SD are available today only with 2 Gb onboard today, micro SD, which are gathering pace, still carry only 1 Gb at best. The same goes for Memory Stick range, with the only difference in higher price of M2. You shouldn’t ignore the now fading away players based off 1” hard drives: before disappearing they will put on the final showdown by proposing up to 12 Gb at compact size and low price in some models. And, naturally, there is no way we are going to see handsets boast 30, 60 or 100 Gb in several years time, while these storages are already available with 1,8” HDD-based MP3-players.

Archos AV5100 with 100 Gb onboard: handsets with similar capacity are not even on the horizon yet

It’s really hard to figure out how much memory users exactly need, but with other things being equal, consumers tend to favor more capacious devices.

Price for memory is another consumer-important thing – for a today’s MP3-player running on a 1,8” GB hard drive it makes 6,5 USD for 1 Gb, for Flash-based models – a bit more than 30 USD/Gb. For reference: cost of SD-gigabyte (without handset’s price) is nearing 20 USD, mini SD – slightly more than 20 USD, micro SD – not less than 30 USD.

Sound recorder

MP3-players’ strengths are unlimited recording time, impressive functionality of bundled sound recorder found on some models, at that they record sound in PC-recognizable and –editable formats; presence of line-in in many models, allowing you to connect external microphone, and adapter for recording from telephone line.

Handset’s attractions are ability to record calls (available not on all models), but many phones have significant limitations when it comes to duration of recording, on top of that handsets possess poor sound recorders functionality-wise, which output clips in rarely used special formats. No extra accessories for recording sound can be attached to handsets.

Apparently, MP3-players’ sound recorders are superior to those found on handsets.

Many MP3-players originate from digital sound recorders. On top of that they have managed to keep some useful “atavisms” (on the photo - M-bird XR-21)


Features of MP3-Players today (which haven’t been changed for several years now) include unlimited recording, enabled MP3 and WMA extensions, recordings on schedule.

Drawbacks: capped frequency range (FM, 74-108 ÌÃö), missing RDS, extremely poor functionality.

One and the same tiny microchip has been empowering players with the radio feature (photo by www.pconline.com.cn)

As compared to players, FM-radio is not so wide-spread among handsets, however if you take an entertainment-aimed phone, it is more likely to have radio module onboard. And if it’s incorporated, it proposes a lengthy list of features. First, RDS support, and on top of that, handsets make use of having permanent access to remote services to the full. For example Nokia offers an integrated solution going by the name of Visual Radio that is in fact a combination of FM-radio and a tailored mobile service, owing to which an ordinary radio broadcast starts “sparkling” with extra content, e.g. various visuals (pictures of artists), texts (information on artists), and online polls etc. The underside of this technology is that it has to be supported by a radio-station, as might have guessed there are not so many of them due to geographical reasons for the time being. Nevertheless the very possibility is very fetching, since it allows revealing future trends of development, approving new approaches that might be used world-over as digital and Internet radio are spreading over the globe.

With Visual Radio you won’t have to guess whose song is being broadcast

Integration of radio and network services might emerge in a different way – for example Sony Ericsson’s TrackID feature. The Swedish-Japanese manufacturers enables turning to the services of the world’s largest music data base Gracenote for identifying artist and title by a short recording of the song that can be made via both radio and microphone. You can purchase the just found track online outright, should you want to. It’s interesting to know that similar feature was implemented by Neuros into its MP3-player a couple of years ago. There the user had to connect his player with a PC that was online, which made the function much less appealing. Comparing that to what we have with TrackID, one can get even more confident of domination of handsets over this field. Maybe the only shortcoming of theirs is the notorious copyrights issue. As a rule, recordings of broadcasts are very limited in time and quality; however the possibility to purchase a song you liked later on looks more appealing as against getting a crude noise-filled recording, especially for the regions where piracy is nearly non-existent.

As we see, MP3-players with their unsophisticated basic FM-tuners are lagging behind handsets.


Prices for stand-alone MP3-players today are considerably lower than those for handsets carrying top-notch music players onboard.


Sony Ericsson W700i: 315 USD

Memory Stick Duo Pro 4 Gb: 150 USD

Total: 465 USD

iPod Nano 4 Gb: 305 USD

Difference: 160 USD

Motorola E398: 221 USD

T-Flash 1 Gb: 48 USD

Total: 269 USD

Ritmix RF 9000 1 Gb: 140 USD

Difference: 129 USD

BenQ-Siemens E61: 192 USD.

MiniSD 2 Gb: 43 USD

Total: 235 USD

Dyne Tuny7 2 Gb: 166 USD

Difference: 69 USD

The difference in prices in most cases is more than enough for purchasing an unsophisticated handset; therefore considerations of saving some coin shouldn’t be on top of your priority list, at least for the time being.

In future prices for music phones are more likely to drop – apparently, after squeezing everything they can from the top and middle price-brackets, manufacturers will start releasing models for the entry-level. On the other hand MP3-players still have some room for further price reduction as well. Forecasting whether the gap in prices will always be significant enough to sound economically purchase of two stand-alone devices instead of one, is rather difficult, as it will depend on policies applied by manufacturers. If the market’s leading players take a decision to invade the MP3-players market’s low-end, they might go on with reducing price for their solutions until it reaches that of MP3-players, and this should force many MP3-players manufacturers to shut down their companies in light of major drop in profitability of the industry. On the other hand, mobile phones manufacturers might prefer getting more profit and follow a different way.

Of course, you shouldn’t forget about contracts offered in many countries that reduce a handset’s price greatly, if purchased along with the device. MP3-players cannot boast the same method of price reduction.


Absolute majority of players supports the most widely-spread lossy formats: MP3, WMA, WAV ADPCM, frequently you will find a device supporting OGG, as well as models dealing with AAC (manufactured mainly by Apple). Of Lossless-formats, you will regularly stumble upon FLAC and APE, iPods have support for Apple Lossless, it is not a rare occasion to see a player armed with WAV PCM support. All in all, materialization of support for lossless format is becoming a trend nowadays – being unable to grasp the difference between lossy and lossless formats orally, consumers keeps on looking for maximum quality, if he (she) can afford it.

As for handsets, usually they can handle MP3, AAC, frequently WMA, but these are lossy formats, on top of that most of other popular formats have gotten left out. Lossless-formats are occasionally represented by Apple Lossless.

When it comes to supported formats, MP3-players have the lead, however limited amount of AAC-enabled (the main format of legal online industry – iTunes) players is somewhat confusing.

A few words about DRM system, relevant for Western Europe, the US and some Asian countries. At present the market is being torn into two DRM-camps: Apple with its very own FairPlay DRM for iPod and Microsoft with Janus DRM for the rest of major players. Respectively, all Apple’s players run on FairPlay, whereas latest proposals by Creative, iriver, Samsung, Toshiba support Janus.

For handsets FairPlay is unavailable, so the only option left is Janus, however the implementation process advances slowly, which prevents users from using many online stores.

This logo implies that a device has support for Microsoft’s DRM. Such feature for mobile phones is still an uncommon thing.

Equalizer, Sound Effects

MP3-players and music handsets are even here, as both of them are equipped with 5-band equalizers with custom tuning and presets. There are some models with 7- or 10-band equalizers and with wide range of genre presets. With the help of different audio effects, SRS WOW, QBS or patented developments, which are usually numerous enough, manufacturers are eager to license different technologies of semi-three-dimensional, pseudo-binaural phonation, etc.

Manufacturers willingly prove effectiveness of their sound effect with graphic models (from left to right – models of SRS and SRS WOW sound effects)

Both players and handsets are often armed with various music visualization effects such as splash screens or screen-savers. All of them are particularly program-based, simple enough and generally speaking useless technologies, so it is hard to reckon up device range as the best one.

Life time

Though some MP3-players are capable to stay active for more than 150 hours after one charge, life time of players and music handsets is comparable.

But it’s important to realize that a handset is a double-purpose device so its charge lasts for three days at best even with player being left out.

Moreover if your battery is low it is better to have out of charge a player than a handset.

On the other hand users on the whole have already used to charge their handsets regularly, and it’s just easier to charge one device instead of two.

But MP3-players can be charged in various ways, i.e. models with built-in accumulator can be charged via PC. By the way most models are equipped with standard miniUSB-port, and many devices even use standard batteries. Majority of devices still use unique-port charger, though exceptions are not such rare things.

So in general MP3-player + inexpensive handset with black-and-white screen are less energy-valued than a modern music phone.

So far, not a single handset can beat Mobiblu DAH-1900 in terms of lifetime, as it lasts 153 hours after being fully charged once.


  • Purchases in online shops (including wires services, WiFi)
  • Audio-CD grip system
  • Downloading from P2P-networks
  • Downloading from the Internet sites
  • MP3-CD, MP3-DVD Purchase

All content sources used by players are also available for handsets, but there is an extra one: acquiring features via mobile services. Though it is more expensive way, it is much easier in operation which is very important for an unprepared user. Also it is important whether your device can download the content straightly without PC.

Here players can set up competition only with the help of WiFi. Nevertheless today coverage of WiFi networks is far inferior to that of cellular networks, further more market hasn’t seen launches of MP3-players will bundled WiFi. Besides, nothing stands in handsets’ way that could prohibit use of WiFi on them.

You must keep in mind the market ringtones as well – today it’s really huge and enormously popular among consumers, so that it’s a really credible way of promoting handsets as music-optimized devices; MP3-players can hardly come up with something similar.

Crazy Frog has become of the symbols of mobile content’s popularity

Generally speaking, content for mobile phones is much more diverse – it includes nearly every last thing you can think of, from rigntones and music to audio files, video clips, still images, texts and applications. Many of the abovementioned options are available for MP4-players and PMPs via Internet or other mediums (DVD etc.). Though, vast majority of users is unaware of such features, unlike content for handsets, advertised all over the place.

Apart from that, being permanently on-the-line devices, mobile phones fit best for listening and watching streaming Internet broadcasts (Internet-radio etc.), furthermore, services of this kind may be provided by operators too. MP3-players can strike back only with podcasts, nevertheless music phones handle them in a convenient fashion as well. Introduction of wireless technologies, digital radio and television might somewhat remedy the situation, but naturally won’t allow them to range with handsets, as these services will be available with them even sooner, which is most likely.

In the end, music handsets in the sense of content’s accessibility and ease of use have the lead – this is one of their fundamental advantages. The only attraction of MP3-players is missing DRM on many models even by known manufacturers, however this turns out to be a ace only for certain audiences on a couple of market.

Data sharing

Not so long ago cellular phones were experiencing significant difficulties with transferring data via wires. However the situation is rapidly shifting for the better today, so that handsets have already managed to catch up with players. But the truth is, phones frequently offer less speed than the cheapest player, as they usually carry so-called USB 2.0 Full Speed that puts out 1-1,5 Mb/s, which are the same figure as those of USB 1.1.

The handsets’ strength is wireless connectivity performed via Bluetooth and WiFi, however these protocols require users to have a corresponding adapter connected to their PCs. On the other hand, with these technologies one can easily trade content back and forth between mobile phones.

Experience Icon Program aims at visual demonstration of advantages and features provided by Bluetooth by means of icons.

Keep in mind, that handset, unlike MP3-player can obtain content without having a PC at hand via Internet or mobile services.

In this field, both progress and time are on mobile phones’ side.

Accessories and standardization

In recent time most handsets showed off non-standard sockets for earphones, which was a serious drawback. Today the very known mini-Jack 3,5 mm starts getting a usual thing for music phones.

Standard 3,5 mm audio-jack today occurs more often if not on a phone’s casing, then at least on its remote control.

However the matters with data sharing ports are a bit more complicated – a few of major manufacturers have gotten to use standard miniUSB-socket, while real USB ports are missing on the market. Although even some among players manufactures still prefer proprietary sockets for they want to generate more income with accessories. Handsets take advantage of Bluetooth support that allows for use of corresponding accessories, earphones, remote controls etc.

Other accessories, like carrying pouches and so on are more spread for handsets in retail stores, while MP3-players manufacturers usually include them in sales package.

MP3-players yield to handsets in the sense of accessories, though it doesn’t prevent them from coming up with original solutions (on the phone – a “cube” by Mobiblu with “speaker-cube” and “FM-cube”)

The only exception here is Apple, since iPod have incredible amount of accessories available that outdo any other portable device.

The widely known Apple’s port has so many accessories available, that it should be attributed to “standard” category already.

As you can see, there are more factors (which are more valuable as well) speaking in favor of replacing a MP3-player with a music phone. But the thing of real importance is that most aspects preventing that can be eliminated. That is why in future we are going see constantly increasing pressure on MP3-industry, while player are going to keep on losing their shares. In perspective we see MP3-players locked in a few niches with ratio between those listening to music with handsets and people preferring MP3-players equaling 4-5 to 1.

Alexey Doroghin (adoro@list.ru)
Translated by Oleg Kononosov (oleg.kononosov@mobile-review.com)

Published - 13 October 2006

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