Mp3 Player Industry

PRODUCTION AND CONSUMPTION

Explain the current global trends in: patterns of production and consumption commercial, political, social and technological changes will impact on that product in the next five to ten years.

The Growing Worldwide Popularity of MP3 Players is driving suppliers around the world to boost production dramatically. MP3 player manufactures are starting to subcontract production. For e.g. iPod, by Apple “designs its products in California, then subcontracts everything else”. The components of the iPod are not Apple components: from Sony screens to Samsung memory chips. Consequently projecting that in the next 5 вЂ" 10yrs all production will cease to be made by the company’s domestic factories.

Thus social implictaions arise on MP3 production and outsourcing which leans toward Foreign labour exploitation. With consumption and demand increaseing electronic companies are finding it harder to satisfy customer needs without increasing costs. Hence manufacturers are relocating to counrties to benefit from lower labour standards. For eg. workers in Foxconn's Longhua plant вЂ" “Apple's notorious iPod City” The Mail claims that these employees work 15-hour shifts and earn Ð'Ј27 per month. Of course, Apple is just one of thousands of electronic companies in its exploitation of cheap labour costs in Asia. Low wages, long hours and China's industrial secrecy make the country attractive to business, particularly as increased competition and consumer expectations force companies to deliver products at attractive prices. And that in the future electronic companies will be moving all production process overseas and close manufacturing plants to gain a competitive advantage

Despite the competition within the music player market (In mainland China alone, 200 companies produce MP3 players), the biggest commercial threat comes from outside. Mobiles and computer manufacturers [are] turing into Mp3 player providers eg. Packard Bell and Nokia. In the next 5 years these sectors will be strong competitors as other companies follow suit. Hence with its inclusion it is estimated that production will increase from 140 million units currently to 286 million by 2010.

Therefore government incentives and policies are being given to ensure domestic technological innovations and production stay in the country to encourage economic growth. For e.g. according to the AEEMA (Australian Electrical and Electronic Manufacturers' Association) the Government has played a strong role in nurturing the research sector of electronic manufacturing, providing A$8.36bn in funding over seven years under the �Backing Australia’s Ability’ innovation policy. In future Australian policies will create a favorable environment for private sector innovation through new electronic incentives to come in affect by