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Market for MP3 Players and Other Digital Audio Hardware Will Top $6 Billion in 2005, Vastly Alter Music Industry According to New Report From Mercury Research

In the short term, Mercury Research forecasts the market for digital audio players will nearly triple in 2000, to nearly $550 million. Unit shipments also will nearly triple, to 2.8 million units from approximately 1 million units in 1999, according to the report. Similarly, shipments of chip sets used to build digital music players are expected to more than double in 2000, to nearly 3.5 million units.

``We are about to enter the second phase of the digital music revolution,'' said Dean McCarron, a principal analyst at Mercury Research and a co-author of the report. ``In the first phase, MP3 players became popular. New products -- such as MP3-enabled CD players for the car and home entertainment center -- will fuel growth in the second phase.''

But according to the report, the third phase is the most exciting phase -- and the one with the largest growth potential.

``Right now, digital audio is appealing only to those who are both computer-savvy and who are willing to dedicate time and effort to maintain their music collections in digital form,'' said Mike Feibus, a principal analyst at Mercury Research and the report's other author. ``But most consumers either don't have the desire or the capability to manage their collections on a computer.

``When those consumers can easily buy and play digital music, then the market will really explode. That's what we forecast will happen in the third phase of the digital music revolution.''

Certainly, all of this forecasted growth is not assured. Indeed, there are several obstacles in the way of achieving such success. For example, high flash memory prices are constraining short-term market growth, according to the report.

And for the longer term, hardware suppliers' ability to meet the challenge of satisfying the recording industry's demands for preventing illegal copying -- without alienating potential customers -- will have a huge impact on the market.

Pricing and Availability

Digital Audio Player Chip Sets and Systems 2000 stands at more than 200 pages, and provides forecasts for digital audio chip sets, flash usage, handheld players and other emerging equipment markets. As part of its coverage of hardware suppliers, the report provides market share for both players and chip set vendors.

Included also is extensive coverage of the technology surrounding this fast-growing market.

Digital Audio Player Chip Sets and Systems 2000 is available direct from Mercury Research beginning today. It is priced at $2,395 for a single copy, $495 for additional copies.

For more information on Digital Audio Player Chip Sets and Systems 2000 or any Mercury Research report, please visit our World Wide Web home page: www.mercuryresearch.com, e-mail service@mercuryresearch.com, or call 480/998-9225.

Mercury Research Inc. of Scottsdale, is a research and consulting firm that is dedicated to providing unparalleled depth and insight into the markets for PC components and related hardware. Founded by experts in the field, Mercury Research publishes reports on a variety of critical technologies, including graphics components, processors and chip sets, and sound chips.

Mercury Research is a trademark of Mercury Research Inc. All other trademarks are the property of their respective owners.

Contact:

     Mercury Research, Scottsdale
     Mike Feibus or Dean McCarron, 480/998-9225
     mike@mercuryresearch.com
     dean@mercuryresearch.com