• by Erik Sass  @eriksass1, August 28, 2007

Portable media players with video capability will outsell audio-only devices by the end of 2008, according to In-Stat, which foresees a big shift in consumer buying habits over the next two years.

The forward-looking report, which predicts unit sales and revenue through 2011, says overall demand for MP3 devices will remain strong.

Currently, only 11% of In-Stat's survey respondents say they would purchase a portable media player "primarily" for its video functions--even those who are buying a video-enabled model. But that number is expected to rise sharply as video-enabled players become cheaper and video quality improves.

In-Stat predicts that total unit shipments of MP3 players and portable media players will reach 275 million in 2011, compared to 182 million in 2006. In the latest In-Stat survey, 52% of 2,408 respondents owned an MP3 player or PMP.

At the same time, music-enabled cell phones aren't gaining much traction versus dedicated MP3 players--but the niche may grow larger as some consumers look for audio-only playback capability as part of cheap, multipurpose devices.

On the mobile phone front, a new study from SNL Kagan suggests that 83% of the U.S. population will have a mobile phone by the end of this year, reaching 100% by 2013. In fact, Kagan says the number will exceed 100% as some users acquire multiple mobile phones for different purposes. Total U.S. wireless revenue is expected to top $253 billion by 2017.