By James Wells

SYDNEY: The mp3 player category, which remained dormant for several years before the introduction of the ubiquitous Apple iPod, has recorded the strongest value growth of any consumer electronics segment, further illustrating the transfer of Australian purchasing behaviour to digital products.

According to data released today by GfK Australia, the mp3 category recorded sales of $506 million over the last calendar year, a 329 per cent increase over the $154 million generated a year earlier.

The mp3 category alone represents 55 per cent of the entire $906 million audio category.

“Mp3 has the potential to be massive. It is no longer on the fringe – it is definitely now a major consumer electronics category and it is here to stay,” said GfK Australia senior account director, Derek Nash.

“It could replace the mini or the micro sound system as it is a one-stop solution for consumers – download the music from CD to mp3 and then play it through your speaker system.

“Who would have thought mp3 would have such an impact? It has cut right across all audio with micro and mini systems now under threat from increasing mp3 sales.

“When you analyse all the audio categories the importance of mp3 becomes very clear. The growth in mp3 has come from other existing portable audio categories which it has clearly decimated within a relatively short time frame, while also attracting new consumers to this market segment.”

The Audio Home Systems category, as measured by GfK, grew by just 1.5 per cent over the last 12 months.

The second strongest performing consumer electronics category by value over the last 12 months was LCD televisions which grew by 214 per cent to $348 million.

“LCD and plasma is now over $1 billion in a category that is essentially two to three years old – that is pretty substantial,” Nash said.

According to Nash, this purchasing behaviour is emphasising what many market analysts are calling the digital lifestyle.

“Consumers are saying that they will get an LCD or a plasma as their television, as well as a portable audio unit and digital still camera. As a result, we have seen a strong switch into notebooks as well. When purchasing products, consumers are asking ‘What are my needs?’, ‘What is the technology?’ and ‘What is my lifestyle?’

“I still think consumers are purchasing one product for one function, so full connectivity is yet to happen.

“Products purchased in the household have seen some major shifts from the standard television to an LCD or plasma as well as audio products into mp3. These are all shifts in purchasing behaviour into new product categories at the expense of existing category,” Nash said.