NPD Group

NPD Group

August 18, 2005 09:00 ET

The NPD Group Canada: MP3 Players Top the Consumer Electronics Market

TORONTO, ONTARIO--(CCNMatthews - Aug. 18, 2005) - Canadians are dancing in the streets as sales of MP3 players more than tripled in Canada between June 2004 and June 2005. According to the latest NPD Group research on the consumer electronics market, growth of MP3 players far outpaced the gains by the second and third fastest growing categories, which were flat-screen televisions (LCD and plasma) and digital SLR cameras, respectively.

While the Apple iPod is the dominant player in this active category, there is opportunity for other brands to build market share, as research suggests that brand name is not the top purchasing driver for Canadian consumers. Pricing, followed closely by product features were deemed more important to consumers than brand name.

NPD research also identified two distinct consumer groups among Canadians: those buying MP3 players for themselves (47 per cent) and those purchasing the players for others as gifts (47 per cent). Those who purchased MP3 players for themselves were more likely to be male (63 per cent) between the ages of 18-34 (60 per cent). The top-ranked purchase drivers for this group were features (47 per cent) and pricing (45 per cent). Brand name influenced purchase decisions only 28 per cent of the time.

Consumers who purchased MP3 players as gifts tended to be female (54 per cent) between the ages of 35 and 54 (66 per cent). The primary recipients of the MP3 gifts were teenage children under 18. Like the previous consumer segment, good value at a good price were more important than name brand in the decision making process. Moreover, 17 per cent of consumers within this group did not remember the name of the brand they purchased and 30 per cent said that they would have purchased an alternative brand if the one they were looking for had not been available.

"The MP3 market has grown at an incredible rate over the last year, but with only 40 per cent of Canadian households in possession of a digital music player, this market is still in its early stages of development," said Pam Buckley, Senior Account Manager, NPD Group. "With so many brand-neutral consumers buying MP3 players as gifts, there is a strong indication that additional marketing on the part of manufacturers would help educate this consumer group on the brands and attributes currently available."

With such a dramatic increase in the number of MP3 players purchased in Canada over the last 12 months, research also indicates that online stores like iTunes or PureTracks will likely experience a corresponding increase in song downloads.

"With the younger demographics spending significantly more time online, music providers would be wise to get a better understanding of the MP3 consumer market," said Buckley.

Other Findings:

- Males were more likely than females to download music from the Internet

- Apple iTunes and PureTracks ranked highest as popular sources for downloading music

- Among those purchasing MP3 players for themselves, 34 per cent cited the Internet as their top source of information when making a purchasing decision. Only seven per cent reported the impact of TV commercials

Methodology

NPD Group sends the Consumer Electronics survey to 50,000 pre-screened online Canadian panellists, 18 years and older, and captures the most recent purchases made over the latest six months.

About The NPD Group, Inc.

Since 1967 The NPD Group has provided reliable and comprehensive sales and marketing information for a wide range of industries. Today, more than 1,300 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition.

About NPD Canada

NPD Canada, a division of The NPD Group, provides critical market intelligence on product movement and consumer behaviour in Canada. Canadian industries tracked include food and beverage, foodservice, apparel, footwear, consumer electronics, automotive, appliances and information technology.

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