MP3 Players Rose From a 12-Song Gadget to a $21.6 Billion Market, Then Shrank to a Niche

The MPMan F10, generally considered the first commercial MP3 player, launched in Asia in March 1998, roughly the size of a deck of cards and styled like an oversized pager. It barely registered with the public. The Diamond Rio PMP300 broke through in the West a few months later, in September 1998. It was slightly larger, and its design more closely resembles what people picture when they think of a media player. It also drew attention because the Recording Industry Association of America sued Diamond Multimedia in an attempt to stop the spread of MP3s.

Both devices shipped with 32MB of storage, enough for about 12 songs. They held less audio than a CD and generally sounded worse, and their real limitation was the interface on their tiny monochrome LCDs. Storage on both could be expanded with SmartMedia cards.

Some manufacturers later traded flash storage for spinning hard drives. The Creative Nomad Jukebox carried a 6GB drive and a design modeled after portable CD players, which made it bulkier than its competitors at 14 ounces. It failed to push MP3 players into the mainstream.

Apple's iPod, introduced in November 2001, opened the golden age of the portable media player. By 2007, roughly 20 percent of Americans owned a personal media player. Microsoft and Creative tried to carve out space with their Zune and Zen lines, but Apple accounted for more than 70 percent of media player sales. The decade also brought Radiohead and Nine Inch Nails experimenting with pay-what-you-want digital releases, Napster popularizing the terms file sharing and peer-to-peer, and Apple's silhouette ads with white earbuds.

The category's prominence was brief. Apple retired the iPod Classic in 2014 and cut the Nano and Shuffle in 2017, leaving the iPod Touch, essentially an iPhone without the phone, as the last model standing; the company did not discontinue the lineup entirely until 2022. By 2011, iPhone sales had eclipsed iPod sales for the first time, and the market contracted fast as smartphones replaced flip phones and BlackBerrys and music consumption shifted from CDs and downloads to streaming.

Reliable figures for the digital audio player market are now hard to come by. Some research firms group all media players together regardless of audio or video, streaming or offline. Those that track audio players separately disagree: some report an industry of more than $180 million that is growing, while others describe a market of only $1.2 million that is shrinking. What is clear is that portable media players have become a very small niche. For most of the past decade, dedicated players were mainly the realm of audiophiles, with companies such as Sony and Astell & Kern steadily releasing high-end models that can sell for well over $3,000, including Sony's NW-A306.