MP4 players

	The ID8610CC PMP from Natural Sound of mainland China features a 2MP camera and 2.8in TFT.

HDD production slowing down;touchscreens, higher storage capacity and multiple functions up the ante for flash PMPs

Flash portable media players (PMPs) will continue to be the staple product for most PMP suppliers in Greater China. NAND flash memory's rapidly increasing storage capacity, together with its decreasing cost, compact size, light weight and durability has made it the preferred storage medium by the majority of suppliers in the PMP market. Taiwan's Topology Research Institute (TRI) projects that 74.9 percent of the total PMP and MP3 players to be shipped in 2008 will be based on flash memory. By 2010, TRI projects the market share will rise to about 80 percent.

TRI cites PMP market leader Apple's adoption of flash memory for its iPod models as the major growth driver for the flash PMP category. Although hard disk drive (HDD) PMPs can technically offer larger storage capacity and faster data rates, issues related to power consumption and space—with slim form factors being the trend in this line, makers of HDD PMPs are faced with the challenge of incorporating a HDD into a very compact housing—hinder the rise of the HDD PMP.

Overall, the PMP line has a rosy outlook. Taiwan's Market Intelligence Center (MIC) projects that global PMP shipments will reach 153.66 million units in 2008, up from about 135.6 million units in 2007 and 105.91 million units in 2006. Supplier bases across Greater China are expanding to meet the growing global PMP demand.

Supply yields a wide variety of PMP options ranging from very basic units to feature-packed, sleek models. Product development focus is on adopting touchscreens, widescreen aspect ratio and value-added functions such as GPS and wireless via Wi-Fi, Bluetooth or 2.4GHz. Many existing models have built-in cameras and games.

Some flash PMP makers have reached the 16MB storage capacity, but mainstream models in 2008 will offer only up to 4MB, which is still a jump from the dominant capacity in 2007 of 1GB and 2GB. Flash PMPs with 8GB to 16GB built-in memory will be sold at premium prices.

In addition to increasing built-in flash memory capacity, makers augment storage capacity by integrating expansion slots for flash memory cards. The common flash memory card formats supported are Secure Digital (SD), miniSD and microSD.

	The Touch B266 from Shenzhen Thomson features a touchscreen and Bluetooth connectivity.

Regardless of product type, the leading makers in the area include Meizu Electronic Technology Co. Ltd, Dongguan Gemei Electronic Technology Co. Ltd, Shenzhen Thomson Digital Technology, Shenzhen Eastbell Technology Co. Ltd and Shenzhen Ramos Digital Technology Co. Ltd. Most suppliers on the mainland are based or have facilities in Guangdong, which has a strong support industry for PMPs. Makers in the province cite the growing popularity of mobile TV as a key growth driver for the PMP line in 2008.

The Taiwan PMP supplier base comprises about 60 makers. Taiwan, which is positioned as the world's second major PMP sourcing hub next to mainland China, highlights its competitiveness in two key areas: strong OEM experience, particularly in feature integration, and flexible production for serving small-volume orders. The leading makers in terms of volume, R&D capability and brand awareness include Micro-Star International Inc. (MSI), Ergotech Technology Co. Ltd, MobiNote Technology Corp., Eastern Asia Technology Ltd (Eastech), Power Quotient International Ltd (PQI), Vosonic Technology Corp. and Lead Data Inc.

Taiwan's supplier base for PMPs has been increasing, with the additional suppliers comprising mainly makers of flash MP3 players. Only about 20 companies on the island produce HDD PMPs. Taiwan makers typically focus either on flash- or HDD-based PMPs, not both types simultaneously. More manufacturers are expected to enter the flash PMP product line this year, while existing HDD PMP makers are not expected to develop many new HDD PMP models.

In Hong Kong, tight competition and thin profit margins are keeping the supplier base to its current size, if not downsizing it. Makers do not expect newcomers this year, and even among the remaining suppliers, most have diversified their product lines. For some makers, PMPs have taken the backseat to other more promising products.

The current Hong Kong PMP supplier base consists of more than 20 makers, all of which offer flash memory-based models. Less than five companies continue to offer HDD versions. Most suppliers have conceded the HDD PMP turf to Apple and other major brands. Many of those that released HDD PMPs in the past have stopped promoting their models. Product development plans are all centered on flash PMPs.

Most PMP makers in Hong Kong are small- and medium-sized companies that cater to OEM and ODM customers. A few major suppliers promote their own brands, such as Coby Electronics Corp. Many Hong Kong PMP suppliers have strong background in IT and portable digital electronic products. They are mostly export-oriented companies.

The many possible combinations of PMP features can blur the distinguishing lines between high-end, midrange, low-end and entry-level products. Furthermore, the different supplier hubs across Greater China may have varying standards for each segment.

Nevertheless, more focus is being given on flash PMPs across Greater China. There is already a 9:1 ratio of flash PMPs to HDD PMPs produced in mainland China. About 98 percent of the PMP output of Natural Sound Enterprise Co. Ltd, for example, comprises flash-based units. The entire PMP output of Shenzhen Thomson and Shenzhen Wistar Technology Co. Ltd are flash PMPs.

On the mainland, entry-level PMPs generally have flash-based memory with displays of 2.5in or smaller. To increase price competitiveness, some makers are foregoing internal flash memory and opting to install memory card slots, mostly for SD cards. MP3 support is basic.

Midrange flash PMPs from the mainland have built-in memory ranging from 2GB to 4GB and screen sizes from 2in to 2.4in. USB 2.0 interface, SD card support and touch panels are common. Codecs for MP3, WMA, WAV and AVI are also often seen in this segment.

High-end models from the mainland may include touch panels, LCD screens larger than 2.4in, GPS support, Wi-Fi or Bluetooth connectivity, and USB 2.0 interface. Support for MPEG-4/2/1 is typical.

HDD PMPs from the mainland are also segmented into low-end, midrange and high-end. Low-end HDD PMPs have 10GB, or smaller storage capacity, and 2in TFT screens. Midrange models have 10GB to 40GB HDD capacity, 3.5in to 4.3in screens, touch panels, USB interfaces and SD card slots. Many of these models support AVI, WAV, OGG, WMA/WMA Lossless, VBR and MPEG-4/2/1.

High-end HDD PMPs from mainland China have memory capacity exceeding 40GB and screen sizes larger than 4.3in. These models have either Wi-Fi or Bluetooth connectivity.

Mainland makers forecast that the HDD supply market will be dominated in 2008 by models with 20GB storage and 3.5in or 4.3in screens. Emphasis in this segment will be on value-added functions such as PDA, gaming, digital TV (DVB-T and T-DMB), GPS, Wi-Fi and Bluetooth. PMP form factors will be playing up slim and compact housings in the coming months.

In the Taiwan supply market, product segmentation is based mainly on storage capacity. Mainstream flash PMPs have a capacity of 1GB, 2GB or 4GB. These models are generally priced at less than $50 per unit. High-end flash PMPs support 8GB or higher capacity. Some high-end models, particularly those with touchscreen displays, are priced at more than $50 per unit. For many Taiwan-made models, the NAND flash memory ICs are mostly sourced from Samsung, Hynix or Micron Technology Inc.

Taiwan's mainstream HDD PMPs integrate 2.5in HDDs with 20GB to 40GB capacity, with the latter priced at less than $200 per unit. High-end HDD PMPs support up to 60GB, 120GB or even higher memory capacity.

Panel size also has a significant impact on pricing. For instance, in Taiwan, the gap between a 2.4in unit and a 3in unit is from $5 to $10. Taiwan makers mainly source display panels from AU Optronics Corp (AUO), HannStar Display Corporation, Chi Lin Technology Co. Ltd, Chuanghwa Picture Tubes (CPT) Ltd and Innolux Display Corp.

Most PMPs from Taiwan feature video and audio recording, TV out, internal speakers/amplifiers, built-in microphones and multiple card readers. High-end PMPs incorporate touchscreens, built-in cameras, games, GPS, digital TV receivers and surveillance.

In the Hong Kong supply market, there is a narrower variance of product features. The storage capacity for flash PMPs is expected to stay at 4GB maximum for a while, as solution providers bide their time before upgrading their chipsets to support higher storage capacity. 1GB and 2GB models will remain as the dominant storage sizes due to their favorable price points. Some companies, including Sysbay International Technology Ltd, are shipping almost equal quantities of 1GB and 2GB PMPs.

Memory expansion of up to 2GB is supported through storage cards such as miniSD and microSD. The smaller microSD will likely take over as the mainstream expansion card in 2008 due to its favorable form factor.

Many recent flash PMP releases can directly play conventional video recordings in formats such as AVI, Xvid and 3GP. In contrast, early PMPs required conversion of videos to low-resolution video formats such as AMV. New PMPs enable videos to be copied and viewed immediately, skipping the tedious conversion process.

The list of supported music formats is also getting longer. Although many models are still limited to playing MP3 and WMA formats, some new models have added support for WAV, OGG and APE.

In terms of software design, an easy-to-use menu interface is one of the top priorities. Many new models use large icons, inspired in part by the Apple iPhone. Others use simple icons similar to the Media Center.

	The PMP-A1 from Shenzhen Wistar has a 3in widescreen HD panel.

Taiwan makers forecast that 2.8in to 4in screens will be incorporated in more products released this year, with 2.8in, 3.2in and 3.6in models showing the most promise. Ergotech has released a flash PMP with a 2.8in screen, the ET-UC40. This has a capacitive touch panel and surround sound effect. Ergotech also offers the DeeJay UC40 and the ET-UC200, which both have touch panels, miniSD slots, 20fps to 24fps video playback, FM radio, voice recording, e-book and built-in speakers. The ET-UC200 has a long battery life, supporting up to 22hr continuous operation.

Aside from touchscreen features, Ergotech emphasizes its products' color and housing design, A/V quality and flexibility, and competitive prices. The company provides buyers with different product casing options using plastic, stainless steel or aluminum. Its PMPs generally support MP3, WMA, AWAV, OGG and APE audio formats, with some models supporting SRS WOW technology.

Icat Technology Corp. combines touchscreen technology with G sensors to differentiate its PMPs. For instance, Icat's iPlug Touch 2.6 features a 2.6in touchscreen LCD and G sensor that enables users to control operations, such as function, song, video or image selection, by shaking the PMP.

The iPlug Touch 2.6 also features PlayFX 3D surround sound effect, FM radio, voice recording via built-in microphone, e-book and pedometer software with calorie calculator. The iPlug Touch 2.6's supported file formats include AVI, MPEG-4, QuickTime, WMV, 3GP, VOB and DAT. The model comes in a shock- and scratch-resistant stainless steel casing with hairline finish. The iPlug Touch 2.6 can support up to 4GB internal NAND flash, plus it has an SD card slot for expansion. It is powered by a Lithium battery with up to 10hr battery life. Icat emphasizes entertainment features, ease of use and trendy designs in its PMPs.

Despite the broader adoption of touchscreens, this feature will remain mostly in the domain of high-end models in 2008. Some suppliers also offer touch sensor keypads. Hong Kong's Innov Technology Group (HK) Ltd offers the AP-60, which integrates a touch sensor keypad and 2.4in TFT LCD. It supports MP4, MP3 and WMA playback, voice recording and digital photo display.

Makers also offer PMPs with large screens sans the touchscreen function. For instance, the PMP-A1 from Shenzhen Wistar has a 3in widescreen HD panel supporting 320x240 pixels. The model can support up to 4GB internal flash memory. It also has an SD card reader. The supported file formats include Xvid, AVI, WMA, WAV, JPG and BMP. Furthermore, the PMP-A1 supports DRM 10.

Shenzhen Wistar's popular PMPs come in high-quality metal shells and feature clear, easy-to-use interfaces. The company has 55 engineers in its R&D department and allocates 4.3 percent of sales to product development. Its focus in 2008 is on integrating mobile TV capacity, particularly DVB-T, into its PMPs.

While touchscreen models have yet to trickle down from the high-end segment, widescreen displays and OLED panels are now common. The enhanced viewing experience provided by widescreen panels and the narrower price gap between widescreen panels and 4:3 panels, have contributed to the quickening adoption of widescreens in PMPs.

About 60 percent of combined PMP and MP3 players produced in Taiwan have OLED panels, and the ratio is growing. The advantages of OLED panels over LCD panels, according to OLED panel makers, include self lighting, wide viewing angle, high contrast, good resolution, quick response, low operating voltage, low power consumption and simple process.

According to Fransky Liu, sales manager at FirstOne Technology Co. Ltd, developing value-added PMPs is a more effective competitive strategy than making low-priced, basic models. FirstOne offers both HDD and flash PMPs that feature surveillance function and built-in 2.4GHz 4-channel receivers. The said products belong to FirstOne's high-end PVR100 series.

FirstOne's PMP-TV, a slim unit at 9.7x7.35x0.98mm and 98g, features digital TV reception. It packs a 3.5in TFT-LCD screen, 400mW internal speaker, equalizers and SD card slot. It is powered by a 1000mAh Li-ion battery that requires 2hr charging time and has 3hr battery life. The PMP-TV is bundled with a pair of 20mW earphones.

The company's midrange models have gaming and built-in cameras. In 2008, FirstOne plans to integrate GPS into its models that have 3.5in or 4in displays. Touchscreens will also be included in the company's upcoming releases.

Icat's iPlug Cam II has a 24-bit 2MP CMOS camera with 2x digital zoom. It supports 320x240 pixel resolution at 25fps for A/V playback and recording in MP4 and 3GP formats. It also records audio in MP3, WMA and AMR formats. The device has built-in 2GB memory and MultiMediaCard (MMC) and SD cards.

The unit integrates a 3in TFT-LCD screen, hi-fi speaker, games, e-book and calculator. The form factor is designed to support its gaming function. Its I/O panel supports A/V-in digital recording, A/V out for external projection, and NTSC/PAL TV-out. It is powered by a Lithium battery with 10hr battery life.

Natural Sound of mainland China combines a 2MP camera and 2.8in TFT display in its ID8610CC, which also has an SD card slot for memory expansion. The company's product developers are focusing on entertainment-based value-added functions and wireless connectivity. Natural Sound's R&D team is composed of 25 engineers and the company allocates 5 percent of sales to product development.

Natural Sound will be strengthening both the hardware and software aspects of its PMPs in 2008. The key objectives for hardware development are to strengthen Wi-Fi and touchscreen features. In terms of software, the company will be enhancing support for multimedia formats and DRM.

Shenzhen Thomson's B266 highlights Bluetooth connectivity and phone call transmission on top of the more common functions of MP4/3 playback, recording and e-book reading. The company cooperates with chipset solution providers such as Sigmatel and Rockchip. It also works with Microsoft. About 30 engineers in its R&D team work on PMP product development.This team can release a new product in 60 days, based on customer requirements.

Eston Technology Ltd of Hong Kong adds a 1.3MP camera as an option to its M62 and M61 PMPs. The M62 has a 2.4in TFT display, FM tuner and miniSD expansion slot. It plays Xvid and 3GP videos, as well as MP3, WMA and WAV music with synchronized lyric display. It alsofunctions as a PC camera, calendar, electronic dictionary, NES games and e-book.

The M61 features a 2.4in TFT LCD that can display up to 262,000 colors. It supports a full-screen playback of AVI movies, as well as MP3, WMA and WAV audio formats. It features digital voice recording, simultaneous e-book display and music playback, 3D surround effect, and JPG photo display. A memory expansion slot at the bottom of the device accepts up to 1GB miniSD cards.

	The M02 from Sysbay of Hong Kong has a 2.4in color TFT display with digital voice recorder, games and optional FM tuner/recorder.

One of Sysbay's most popular models is the C11, a rubber-finished sporty PMP that plays MP3 and WMA music and AMV videos. It includes a 1.8in color TFT screen that supports JPG and BMP browsing. The bundled earphones come in striking blue rather than the traditional white, silver or black. The PMP is powered by a rechargeable Lithium battery.

Sysbay's M03 features a 2.4in color TFT display for viewing AVI videos and JPG, BMP and GIF images. It plays MP3, WMA, WAV, OGG and APE audio files with ID3 tag display, A-B repeat playback and equalizer settings. Other built-in functions include digital voice recorder (MP3 and WAV), games and optional FM tuner/recorder. It is available in black/red and white/gray/red color combinations. Another model, the M02, has similar functions as the M03 but with a slightly different control panel.

2.4in models dominate Sysbay's PMP shipments. The company offers more than 20 designs and introduces five or six new models every trade show season. It strives to separate itself from competitors by developing its own models, which are characterized by their distinctive rubber finish.

The company plans to release a full touchscreen PMP by H2 2008.

For game enthusiasts, Eston offers the M70, a flash PMP with a 2.8in color TFT screen that slides back to reveal control buttons for playing NES and SFC games. It plays AVI movies, MP3 and WMA music, and displays JPG images. It includes a digital recorder, 1.3MP digital camera that can be interpolated to 2MP, SD/MMC slot, FM tuner and ID3 tag display.

Eston closely monitors emerging trends and is quick to apply these in its products. It offers about 10 PMP models with screen sizes of 1.8in to 2.8in. It hopes to expand its range of available models by releasing a new model every two or three months.

Innov's gaming PMP model lineup includes the AP-55 and AP-05. The AP-55 has a 3.6in screen and plays up to 32-bit games. The AP-05 has a 2.4in display that can support 8-bit games. Both models support memory card upgrade.

Innov's product catalog includes almost 100 models of PMPs, but only about 50 are still active. The majority of these models use public molds. The company has recently been developing its own designs, and has released at least five as of end-2007. The OD-007 and OD-008 are two of Innov's best-selling PMPs. Both models have 2.4in full color TFT displays and built-in FM tuners and voice recorders. They support MP4, MP3 and WMA playback, as well as digital photo display.

Innov plans to release three new designs every quarter during 2008. The upcoming releases will feature larger screens ranging from 2.8in to 3.6in. Some models will integrate new functions, such as FM transmitters and Bluetooth dialing.

More companies across Greater China are planning capacity expansions this year.

Shenzhen Thomson's monthly capacity for flash PMPs is 150,000 units and its average monthly yield is 100,000 units. It plans to boost its PMP production capacity by 40 percent in 2008. It will acquire additional testers, surface-mount machines, assembly lines and plastic injection molding machines. The company will prioritize production of Bluetooth and Wi-Fi MP4 players and RMVB players.

As of end 2007, Natural Sound's monthly PMP production capacity was 80,000 units and its average monthly output was 50,000 units. Within 2008, the company will be expanding its production area by 1000sqm and procure two new Juki surface-mount machines in a bid to ramp up its capacity and output volumes.

Shenzhen Wistar's in-house monthly production capacity for flash PMP players is 50,000 units, with actual output averaging at 38,000 units monthly. The company projects its monthly production in 2008 will rise to about 42,000 units for at least 10 percent growth.

Taiwan-based Ergotech's factory in Shenzhen, Guangdong has six production lines that can produce up to 200,000 units of flash MP3 and MP4 players in a month. Its output was at 150,000 units per month as of end-2007.

Icat, which has its headquarters in Taipei, also has its factory in Shenzhen. The factory has a monthly PMP production capacity of 150,000 units and an average monthly output of 120,000 units.

	Taiwan's FirstOne incorporates digital TV reception in this slim PMP.

Export-driven PMP suppliers in Greater China will continue to focus on their overseas business this year in the face of strong worldwide demand. Taiwan's Ergotech said that export sales account for 80 percent of the company's total sales. Its major export markets are Europe, the US, Southeast Asia and the Middle East.

Icat generates 95 percent of its revenue from exports. Its major customers are in Europe and North America. About 70 percent of its PMPs are shipped under OEM or off-brand terms, and 30 percent is sold under the company's own brand, Icat. The company predicts a 20 percent growth in PMP sales in 2008.

FirstOne, which subcontracts production to factories in Taipei and Guangdong, ships about 40,000 PMPs monthly or 100 percent of its output. OEM and ODM account for half of its sales, and own-brand sales make up the other half.

Shenzhen Thomson ships its PMPs to Europe and the US. About 90 percent of the company's business is contributed by its major OEM and ODM clients, including Minton, Sytech, Schneider, TechniSat and Powerman.

The entire PMP output of Natural Sound is for export to Europe. OEM business accounts for 95 percent of sales. Its clients include Best Buy, Hyundai, Naxa and Nakazaki.

Hong Kong's Innov exports its PMPs to France, Belgium and other European countries. It also ships to Mexico, Brazil and the US.

Eston exports mainly to Europe, India and Japan. It also sells its PMPs in mainland China under the ENT brand. Its factory in Shenzhen handles all production aspects besides design. It can turn out 80,000 PMPs per month.

Sysbay's main export markets are Germany, Northern Europe, Chile, Mexico, Japan and Thailand. A member of the Shun Tat Group, the company has been manufacturing consumer electronic products since 1997. It owns a 120,000sqm factory with 1,500 employees in Dongguan, Guangdong with a monthly production capacity of 200,000 units. Sysbay has more than 20 engineers in its R&D department. It offers services from product design and cost analysis to packaging design and marketing support.