New Device Segment Advocating Digital Media on the Go, Reports In-Stat/MDR.

SCOTTSDALE, Ariz. -- Following the current market trends of offering and supporting digital content, while facilitating portability, the handheld audio/video player market is poised to grow consistently over the next five years, according to In-Stat/MDR (http://www.instat.com). The high-tech market research firm projects that this segment will experience 700% growth in 2004, and an overall CAGR of 179% through 2008.

The first of these devices emerged in 2003 and by the end of that year, consumers were already somewhat familiar with them. In a late 2003 In-Stat/MDR survey, nearly 30% of respondents indicated they were familiar with these devices. Also known as Personal Media Players (PMPs) or Personal Video Players (PVPs), most of these handheld devices include audio, video and imaging functionality. Additionally, some also offer the ability to act as a portable PVR, recording directly from the TV to the device. PMPs support a variety of data formats, although they offer varying levels of native codec support.

"Recent devices have had high price tags and are most useful to consumers who already have a lot of their own content," said Cindy McCurley, an industry analyst with In-Stat/MDR. "One of the critical needs for success in this product segment is the availability of content. Today, consumers have some content of their own, but many in the industry feel that the real value of these products will emerge from widespread use of downloadable video content."

This year these products will primarily attract PC-savvy, early adopters; however, most companies are targeting three types of users: the commuter, the traveler and people wanting to entertain their children. McCurley believes that overall, this is a viable market segment, but it may take a while to develop to the scale that many electronics manufacturers desire.

A recent In-Stat/MDR report also finds that:

--Most of today's devices are using a 1.8-inch or 2.5-inch, 20GB drive. Capacity will increase as access to content increases and component prices decrease.

--The majority of today's products are either based on Microsoft's Portable Media Center (PMC) platform or on a Linux platform. In-Stat/MDR expects that PMC devices will represent about 25% of shipments this year.

--Most current or upcoming products will be priced in the $400-$600 range. The ASP is not expected to decrease very quickly over the forecasted period.

--Some PMP products are PC-centric, while others do not require the use of the PC. This differentiation may sway some users in their choice of devices.

The report, "Handheld Audio/Video Players: Audio, Video and More!" (#IN0401162ID), analyzes and forecasts the worldwide market for these devices. It evaluates the segment with regard to the evolution of the device, the features and functionality enabled, and the market drivers and hurdles. It also reviews components such as platforms, processors, hard drives and displays. An overview of products and manufacturers is also included. The report offers five-year forecasts for worldwide unit shipments, ASPs and revenues, as well as platform and regional segmentations. Forecast discussions include assumptions and annual trends. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?id=27 or contact Erin McKeighan; [e-mail] or 480-609-4551. The report is priced at $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

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