MP3 players evolving on convergence

By Yoon Ja-young

Smartphones have cornered many industries as the handy devices have many things to offer. MP3 players are often picked as the biggest victims of the smartphone boom and sales have indeed been hit hard, but local manufacturers are seeking ways of surviving the rapid shift toward convergence by strengthening divergence. In other words, MP3 players are going through an evolution of their own.

Market dwindling

Bill Gates applauded the MP3 player made by iriver, a Korean manufacturer, in his keynote speech at the Consumer Electronics Show held in Las Vegas in 2005.

iriver started as a small local manufacturer to sweep the global MP3 player market with sales surpassing 450 billion won in 2004. But the launch of smartphones has pushed it into losses.

The maker of premium MP3 players sustained 20 billion won in operating losses last year, with sales dropping by 25.6 percent upon the decline in demand for MP3 players, portable multimedia players (PMPs) and electronic dictionaries. Cowon System, one of iriver’s competitors, also saw its sales drop by 10.6 percent and operating profit plunge by 17.8 percent.

Surveys show that new devices such as smartphones are changing people’s lifestyle, and consequently, the market.

According to a survey by Trend Monitor, a local consumer survey service, 33 percent of respondents said they are spending more time on smartphones than before while 47.7 percent have reduced time spent using MP3 players. When asked why they are increasingly putting their MP3 players aside, 61.2 percent said “because other digital devices include the functions of MP3 players.”

Kakao Talk through MP3 player

The emergence of smart devices is a threat for MP3 players, but manufacturers are overcoming the crisis by upgrading their gadgets. Now, users can enjoy Kakao Talk, the popular messenger service application, on their MP3 players. It is in fact little different from smartphones, with the exception of being able to make voice calls.

Cowon System started upgrading the operating system of its MP3 player “COWON D3 plenue” to Gingerbread this month. It is the first time that an MP3 player comes equipped with the Android 2.3 version. Cowon System expects the upgrade to improve the Web browser, play movies and music.

In the latest MP3 Player by Cowon System, Kakao Talk is installed as an added bonus. It bolstered the mobile communications feature of the gadget, expanding the Internet phone service through the use of the Wi-Fi network. The announcement of the upgrade made stocks of Cowon System rise to the daily ceiling for three consecutive trading days.

“The market talked about a crisis when Apple launched the iPod, or Samsung Electronics started manufacturing MP3 Players. However, we focused on improving our existing products,” said Kim Yong-seok, a representative for Cowon System.

It is dealing with changes in the market by launching smart devices as well as focusing on “divergence” in contrast to the convergence of diverse devices, improving what it does better than the competition.

“We determined that it’s time for us to introduce changes again, so we added the smart operating system. Cowon started uploading Google’s Android operating system on its MP3 players from last December, and they offer almost everything that smartphones boast of.”

iriver has taken things further than Cowon System. It is transforming into a smartphone manufacturer, with its first devices scheduled to be launched through LG Uplus, the country’s smallest mobile carrier, around the end of this month.

MP3 players have their own strength that smartphones cannot match and manufacturers are focusing on this. “When it comes to the quality of music, you can’t say that smartphones offer satisfactory performances yet. For pure appreciation of music, smartphones are still second fiddle,” Kim said.

Hence, some consumers, especially music aficionados, are choosing the combination of feature phones and these premium MP3 players, instead of buying smartphones.

PMP manufacturers are also facing difficulties amid the smartphone boom, but they are surviving them by offering high definition (HD) or making online lectures more convenient to attract middle and high school students. Cowon has unveiled its 3D PMP with which users can enjoy 3D content without wearing glasses.