The market of portable digital media players has been increasing in the last ten years and so has the market of chips for PDMPs. However, due to the economic downturn, popularization of mobile phones and other devices with multimedia features, the market of chips for media players will shrink by almost 40% by 2013, claims IDC market research firm.

The worldwide semiconductor market for portable media players is poised to drop significantly from $7.5 billion in 2008 to $4.6 billion in 2013, representing a negative compound annual growth rate (CAGR) of -9%, according to a new forecast from IDC. A mature market, the economic slowdown, growing similarity with mobile phones and mobile Internet devices (MIDs), and inevitable cannibalization all contribute to the shrinking semiconductor opportunity in PDMPs. Additionally, portable digital media players will no longer be the largest market for NAND flash memory.

“As PDMPs have grown in capabilities, the dividing line has blurred between multimedia phones and MIDs. Moving forward, one should expect the semiconductor players to focus on the larger multimedia phones and growing opportunity in MIDs,” said Ajit Deosthali, research manager for short range wireless semiconductors at IDC.

While revenue for most of the semiconductor components will decline in line with the total decline in PDMP unit shipments, wireless connectivity semiconductors will exhibit modest growth, driven by the increase in attach rate for FM, WLAN, and Bluetooth radios.