Many in the industry believe the success of flat-panel displays is partially helping to send audio into the doldrums. With displays taking up a larger portion of a their budget, consumers have less to spend on audio. This is ultimately supported by another rampant trend in audio—bundling. For proof, look no further than home-theater-in-a-box (HTiB). Once sold separately, the various comp-onents of an HTiB solution now sell for much less when packaged together. Cannibalizing sales of separates, HTiB managed to grow 30 percent in 2003, reaching 3.6 million units and generating nearly $1 billion in factory revenues.
But HTiB is certainly not the rising star of the audio category. That honor belongs to all things MP3. Bolstered by the swelling crowd of pay-per-download services and the huge libraries of MP3s on consumer PCs, MP3 devices rose in triple-digit growth over the past year. Leading the pack are the portable CD players capable of playing CDs burned with MP3s. Sales here rose 260 percent during the past year, accounting for 5 million units. That dwarfs even the flash- and hard drive-based players, which topped 3 million units last year, a 75-percent growth over 2002. For retailers focused on high-end A/V or custom installation, it's time to ask: What are you doing to reach out to the growing PC/MP3 consumer base?
Certainly flat panel and MP3 aren't the only digital product categories that saw great gains during 2003. The other star performer was (and continues to be) the digital imaging category. Manufacturers sold 60 percent more digital cameras in 2003 than in 2002. Shipments reached an all-time high of 14.8 million units, pulling in almost $4