Napster Wars: Will It Hurt MP3?

Electronic News, August 21, 2000 by Steven Fyffe

The market for portable digital audio devices would continue to grow regardless of Napster, said Mike Paxton, the senior analyst covering Converging Markets & Technologies at Cahners In-Stat Group in Scottsdale, Ariz. "The availability of Napster files has never driven the majority of portable music sales," he said. "Napster just happens to be the lightning rod out there for everybody. There are other sites out there that can do the same thing."

He forecast unit shipments of portable digital audio devices would quadruple this year. By 2003, the market would reach almost 10 million units, he said. But given the optimistic forecasts for future flash demand, even 10 million amounts to a small slice of the pie.

MP3 players would account for 1.9 percent of the overall flash memory market and 15.7 percent of the total NAND market in 2003, Semico's Wawrzyniak said. Fluctuations in market segments that small would not effect the overall flash market, he said.

"If MP3 player units drop, the effect on the Flash market would be very small," said Wawrzyniak. "If the forecast went down somewhat, it would not have that much of an effect. If it went up, it really wouldn't have that much of an effect."

Napster likes to think it has slightly more sway with the world. So does its influential friend Intel, according to Napster's Barry. "Andy Grove, the chairman of Intel, recently said, 'The whole Internet could be rearchitected by Napster-like technology,' " said Barry.

Even if Napster dies, its legacy seems destined to live on.