The popular Apple device, which accounts for more than three quarters of portable music players sold, shows no signs of losing momentum, having conditioned users to expect and buy regular upgrades, JupiterResearch said. Strong design and ease of use is also helping to keep sales strong.
As a result, Apple is expected to hold on to its dominant position in the U.S. market for the next 12 to 18 months, JupiterResearch analyst Michael Gartenberg said. During that time, Apple is expected to remain strong against competition from Microsoft's Zune, set for release in mid-November, and from music phones.
"It's Apple's game to lose," Gartenberg said. "But there will be constant pressure on Apple to innovate and refresh the product line to continue capturing the hearts and minds of consumers."
Microsoft is expected to become a serious threat over time, but it will take awhile for the company to gain traction in the market, and deliver products with features capable of luring customers from Apple, Gartenberg said.
All the players will have to deal with changing market conditions, such as the ongoing shift from early adopters who tend to purchase multiple devices and upgrade regularly to more mainstream consumers. By 2011, the number of people with portable music players is expected to top 100 million from 37 million this year, JupiterResearch said.
In 2009, the number of mobile phones that can play digital music is expected to surpass the number of music devices. Those numbers, however, do not mean that a lot of consumers will actually be using their phones to download and listen to music.
Slow downloads, incompatibility among devices and services, high prices and difficult user interfaces are expected to hold back over-the-air music purchases, JupiterResearch said. In addition, wireless carriers are failing to provide consumers with the means to store their music collections on their phones, a move that would boost usage of the devices. The reason for the lack of enthusiasm is carriers can't charge for the feature.
"We don't see the music phone displacing the music player anymore than the camera phone displaced the digital camera," Gartenberg said. "We see these devices as complementary to each other."