Magazines Archives - 2007 March

Prices of MP3 Players to drop, while those of leather goods on the rise
Story 8

PRICES of MP3 players are expected to drop, according to a new survey conducted by Global Sources, a B2B media company.

The Global Sources’ China Sourcing Report: MP3 Players found that of the 54 MP3 player manufacturers surveyed, 53% plan to cut prices by 10% or less.

Another 19% said they expect prices to fall between 10% and 20% while a further 11% are projecting MP3 price falls of 20% or more.

Explaining the phenomenon, Mark Saunderson, publisher of the report, said: “The price of flash memory has steadily decreased, with the trend expected to continue for several years.

This has reduced the production costs of flash-based MP3 players, which account for 66% of players globally.”

The survey also found that global demand for MP3 players are set to grow 20% on-year in 2007, with many China

manufacturers planning to boost 2007 exports to meet this demand In 2006, China accounted for 52% of global MP3 player production, the report said.

Prices of leather goods, on the other hand, are expected to rise this year. According to Global Sources, a good 87% of China’s leather garment manufacturers plan to raise export prices in 2007, of which 6% will raise prices by 10%-15%; 52% between 5% and 10%; and 42% less than 5%.

“Due to higher import taxes, the price of raw leather shipped into mainland China is projected to rise this year,” said Global Sources’ general manager of content development Michael Kleist. “Manufacturers also expect to be hit by the revaluation of the yuan and rising labour costs. “Despite this, most makers expect to limit price increases to 10% or less to

compete for overseas orders.” The survey also found that manufacturers in China are going upmarket, and are targeting the European and US markets.

“Russia is currently the top importer of mainland China-made leather garments. However, many manufacturers are reducing shipments there due to new tax policies which are hampering mainland China’s exporters,” said Kleist.

“A large percentage of suppliers are now producing higher-end models and shifting their export focus to the EU and US markets.”

Among the surveyed manufacturers, 40% said they would target exports to the EU, 33% plan to focus on the US while 12% are planning to target Asia.

The remaining 15% said they plan to focus on non-EU European countries, the Middle East, Africa and other regions.