Due to the rapid growth of these two segments, iSuppli believes the worldwide market for digital recorded music will reach $14.9 billion in revenue by 2010, expanding at a Compound Annual Growth Rate (CAGR) of 40.7 percent from $2.7 billion in 2005. Meanwhile, the market for physically distributed music, i.e. music CDs, will decline to $19.6 billion by 2010, down from $27.3 billion in 2005.
Major trends in digital music include:
- The emerging competitive battle between mobile and broadband music services.-- Mobile/cellular music's generation of new revenue streams, as well as comparatively lower piracy risk and new forms of music derivatives.
- The strong expansion of broadband music revenue in North America, and the nascent growth in Europe and Japan.
- The vertical integration of the music playback devices, software and online stores, as more competitors mimic Apple's successful iTunes/iPod model.
- The rising number of mobile music track downloads and the increasing sales of music-enabled phones as a competitive threat to broadband music and standalone MP3 players. Music-enabled phones already out-ship MP3 players by a factor of more than 2 to 1.
Of these, the most important trend in digital music is the increasing competition between broadband music distribution and mobile network music distribution.