Oct. 13, 2008 -- MP3 players remain among the most popular holiday gift items, but American buyers have changed their tune when it comes to snapping them up the way they once did. According to NPD's Household Penetration Study, 50 percent of U.S. households now have at least one MP3 player.
Furthermore, cell phones have stepped up their game when it comes to playing music. According to NPD's Mobile Phone Track, 65 percent of handsets sold in the second quarter were able to play music, and 62 percent had a removable memory slot.
In partnership with the four major music labels, SanDisk recently announced an initiative called slotMusic designed to fill those slots with a modern-day equivalent to the CD -- much smaller, of course, and with more capacity to include digital goodies such as art, liner notes, music videos and more.
So MP3 player manufacturers must do what they can to keep the market fresh. In Apple's history of market-leading MP3 players, no product has gone through as many revisions as its flagship iPod nano, which itself replaced the very popular hard-drive-based iPod mini.
In its first three generations, the nano progressed from a black or white polycarbonate shell, to one that used aluminum, as the mini did, to a squat tapered version that brought the screen close to the scroll wheel and finally gained the ability to play video.
In the fourth generation, Apple has gone back to the narrower form factor, rounded the edges into an oblong perimeter that includes a curved screen, and lengthened the display to restore a sense of proportion. It has also greatly expanded the color palette of choices to nine, covering nearly every hue in the rainbow and labeling the selection "nano-chromatic."
It's also looking to shake up the market in a literal way. By use of a sensor called an accelerometer, consumers can initiate song shuffling by shaking the player.
But the most important change from a software perspective is the addition of a feature called Genius that allows for tailored playlists on the fly. Genius looks at what you and other iTunes users are doing in terms of listening to, buying and rating different songs.
More MP3 Players and Digital Music
It can be invoked on the player or within iTunes as a way to discover music already in your library and available on the iTunes store. Genius joins a number of other offerings from companies that can recommend music based on music you or your friends already have, including MusicIP, Goombah and freshly hatched Echo Nest.
Microsoft's Zune, has the No. 2 share in the high-capacity hard drive category but is a distant third in the larger flash memory segment of the market behind SanDisk's Sansa line. It is also adding more music discovery features in version 3.0 of the Zune software to accompany new higher-capacity models it recently released.
Microsoft's approach is more graphically rich than Apple's, and if you're a Zune Pass subscriber, you can obtain the full songs without having to pay extra. And while it can't create playlists on the player like Apple's Genius feature, Microsoft is also introducing a feature that lets you acquire songs that you hear on the Zune's built-in FM radio.
Then, of course, there's the Internet radio Web site Slacker, which sells its portable Slacker G2 player. Slacker's portable device works by storing copies of stations from its Internet radio service on the product when you're at home, so you have plenty of fresh content on the road. (You can also store a few of your favorite tunes on there as well.)
The device allows you to mark certain songs as favorites, which will cause them to play more often, or ban them. And if you pay for the premium radio, you can even save played songs to the player to player to listen to later.
These new options can help keep MP3 players fresh, but they'd all have even more potential if they could connect to the Internet on the go. That ability, though, is where music phones continue to deliver "chin music" to the iPod and its competitors.
Ross Rubin is director of industry analysis for consumer technology at The NPD Group.