Waterproof MP3 players

	The AAA battery-powered GMP-01 from mainland China's Global Products has a blue-backlit OLED screen.

Video playback capability, smaller form factors, improved designs and a range of value-added features keep the product line dynamic.

Under efforts to prop up sales amid the global economic crisis, makers of flash MP3 players in China are investing more in product enhancement to attract orders and boost thinning margins.

Many suppliers are releasing models with video playback to meet buyer requirements. Others are developing products with smaller form factors and fashionable designs. Units with more value-added features are also expected to roll out from China factories.

China makers cater mainly to the low-end and midrange markets, as leading MP`3 player suppliers such as Apple, Sony, Creative, Archos and Samsung dominate the upscale segment. Entry-level products are shipped primarily to the Middle East, Africa, South America, Southeast Asia and Australia.

Midrange and high-end units are exported mainly to the US and the EU. Shipments there, however, are expected to decline in coming months, as the PMP/MP3 player markets become saturated. Many suppliers are therefore exploring new areas, including Africa and Southeast Asia, to expand their reach. Most exported products carry CE, FCC and RoHS certification.

The downturn is part of the broader economic crisis worldwide. According to an iSuppli forecast, global MP3 and portable media player or PMP shipments will reach 231 million units in 2009, an increase of only 4.5 percent compared with last year. A further projection is that the PMP/MP3 player industry will exhibit a CAGR of just 4.3 percent for 2007-12.

China makers in general have lowered their growth projections for 2009 due to the current economic situation. Suppliers expect fewer orders this year than in 2008, and some even predict a reduction in exports of as much as 20 percent in 1H09.

	Model S11B from Hong Kong's Sysbay has up to 4GB memory, and plays MP3 and WMA files.

As flash MP3 players face tight competition from other personal entertainment electronic products such as PMPs and music phones, China suppliers are looking at ways to keep the line’s growth steady.

One method is to incorporate video playback in models. Many suppliers have shifted production focus from units with basic audio functions to those supporting one or more video formats. Makers are releasing more models that support WMV, AAC, AVI, MOV and ASF. Further, suppliers are producing units that play back more audio files and can display GIF, BMP and JPEG image formats. Although many flash MP3 players are now equipped with video playback, the number of video formats supported is still limited as some of these require software conversion in order to work on such players.

Therefore, PMPs appear at an advantage in terms of supported video formats. However, since flash MP3 players are priced about 20 percent less than PMPs, suppliers are optimistic of generating steady orders for the line.

Makers are also focusing on enhancing the cosmetic design of their products. As most flash MP3 player suppliers in China, especially midsize and small companies, still rely heavily on public molds, innovative designs will help them differentiate their products from the competition.

Besides designing models with toy, necklace, watch or even sunglasses configurations, smaller form factors and a fashionable appearance, makers can integrate features such as Bluetooth, Wi-Fi and touchscreen on request. They have also incorporated a TXT file viewer into some upscale units. Many models come with a USB 1.1 or 2.0 interface. An MMC/SD card reader and games are optional functions in high-end units.

Flash MP3 players from China can be classified according to screen size and type, solutions adopted and value-added features.

Although models with basic audio functions and without a screen are still available from China, these are expected to exit the market in the near term. The bulk of China’s MP3 player output includes units with FSTN, CSTN, OLED or TFT LCD. Models are available in screen sizes of 1.1 to 2.2in. Products with CSTN and OLED displays are the mainstream. Low-end and midrange units generally come with FSTN or CSTN panels, while high-end and some midrange models adopt OLED or TFT LCD.

More suppliers are adopting the OLED screen for their products since it is smaller, lighter, more efficient and has lower power consumption than the LCD type. With the decrease in its technical cost, OLED is expected to become the primary screen used not only in MP3 players but also in other portable electronic products with displays.

Low-end, midrange and high-end models also differ in terms of solutions used, which include codec ICs, audio processors and MCU ICs.

Solutions from Actions, Rockchip, Sunplus and SigmaTel are generally adopted in low-end and midrange products. These include Rockchip’s RK2606 and Actions’ ATJ2097. Those from Philips, TI and Samsung are mainly used for high-end units.

Players without a screen and with 1.1in or smaller FSTN or CSTN screens are low-end models. These have an A-B repeat feature, color backlight and USB 1.1 port. WAV, MP3 and WMA formats are supported. The maximum internal memory is 2GB.

Midrange units are fitted with 1.5 to 1.8in CSTN, OLED or TFT-LCD screens, but most have CSTN or OLED displays. These have an A-B repeat feature, USB 2.0 port, FM radios, TXT file viewer, lyrics synchronization, microphones and WAV recording. The compatible formats include WAV, MP3, WMA, ASF, AAV, Ogg Vorbis, JPEG, MTV and AMV. The maximum internal memory is 4GB.

High-end models come with 1.8 to 2.2in CSTN, OLED or TFT-LCD screens, although most adopt OLED or TFT LCDs. Aside from functions supported in midrange products, models in the high end have built-in stereo microphones, earphones and speakers. These also feature clocks, alarms or calendars. Products have a maximum internal memory capacity of 8GB. WAV, MP3, WMA, ASF, AAV, Ogg Vorbis, APE, FLAC, JPEG, BMP, GIF, MTV, AMV and AVI formats are supported. The optional features include MMC/SD card reader and games.

Flash models continue to dominate China’s production of MP3 players, accounting for more than 80 percent. HDD-based versions make up the rest.

Several factors have made flash-based models the mainstream. First is the increasing availability and lower prices of NAND flash memory chips. In the past few years, the average cost of this component has significantly decreased.

DRAMeXchange estimates that the total reduction in the cost of 8 to 16GB NAND flash memory chips from March 2007 to December 2008 reached 90 percent. This has encouraged many China suppliers to release more flash-based models.

Flash memory’s increasing capacity is another factor fueling production of China’s flash MP3 players. At present most models are equipped with 16GB maximum internal capacity. Some units can even reach 32GB. Hard disk drive or HDD MP3 players are usually 20, 40 or 80GB.

Other advantages of flash memory over HDD include lower power consumption and lighter weight.

The decrease in NAND flash chip costs, coupled with the fact that main components such as ICs, OLED and LCD panels are less expensive, should push down the prices of flash MP3 players from China by 5 to 20 percent in the next six to 12 months.

China has more than 300 makers of MP3 players, the majority of which produce mainly flash-based models. These suppliers also manufacture other electronic products, including PMPs, PDAs, smartphones and digital photo frames.

Most are located in Guangdong province, although some can be found in the provinces of Fujian, Zhejiang and Jiangsu, and in the city of Shanghai. The majority of suppliers in Guangdong are scattered in Shenzhen, while others are based in Dongguan, Zhuhai and Zhongshan.

Privately owned enterprises make up the bulk of the supplier pool and mainly offer OEM and ODM services. Only a few are involved in OBM. Products that carry in-house brands, however, cater mostly to the domestic market.

Although China suppliers are engaged primarily in OEM business, the IPR issue remains a major concern among them. This is because IPR fees can significantly raise the prices of finished products, compromising competitiveness.

To address this issue, some makers are improving their product development capability and are trying to master the core technology needed to manufacture MP3 players. Others are planning to negotiate with patent organizations to give them equal opportunity in promoting their products internationally.

Generally, suppliers of MP3 players in China can be classified according to their monthly output. Companies that produce 10,000 units or less are considered small, while those making 20,000 to 80,000 products are categorized as midsize.

Large makers produce a maximum of 200,000 units every month.

Hong Kong suppliers of flash MP3 players continue to reinvent their products despite a marked slowdown in demand. Although exports of MP3 players fell by more than 20 percent in terms of value in 2008, many makers recognize the importance of innovation in attracting orders.

Few companies are opting to incorporate expensive add-ons in new models. Some continue to develop new housing molds, however, including attention-grabbing designs such as the Bird’s Nest stadium and Beijing Olympics-commemorative flash MP3 players shaped like a gold medal.

Most suppliers are resorting to low-cost, but just as effective, methods to improve product design. These include exploring new shapes, styles and surface finishes. Aside from bold, solid colors, some makers are offering products in pastel colors. Miniature, clip MP3 players have also been released, including pen-shaped models.

Makers are also developing models for niche markets. Suppliers targeting the physically active consumer are releasing products for rugged daily use. Many models are water-resistant and feature a rubber housing to withstand bumps and falls. These can be worn around the neck, wrist, arm or waist.

Makers targeting female consumers, on the other hand, are launching models shaped like common feminine items such as compact powder kits and lipsticks. Other units are decorated with feminine prints or semiprecious stones, and some can even be worn like jewelry.

Flash MP3 players for children usually come in the shapes of popular cartoon and TV/movie characters. Suppliers also produce flash MP3 players designed for pro-environment consumers. These products are powered through solar charging.

Despite the focus on design innovation, the functionality of flash MP3 players from Hong Kong is not diminished. Standard features found in products include MP3/WMA playback, 4GB or higher internal memory, built-in equalizer and 3.5mm earphone jack. The list of optional features includes OLED or LCD screen, ID3 tag display, video playback, voice recorder, FM radio, DRM 10, internal rechargeable battery, SD/microSD card slot and support for additional music formats such as Ogg Vorbis and AAC.