Sales of online music and digital audio players look set to boom according to industry analysts.

A report from In-Stat/MDR magazine stated that analysts believe worldwide portable digital-music player sales will grow from "about 6.8 million in 2002 to over 36 million in 2007". Hard disk drive-based players, such as Apple's iPod and Creative's Jukebox, will "experience the highest growth rate", according to the study.

But online music download services still need to be refined. "Although subscription services are offering some of what consumers are asking for (streaming, downloading, burning), issues related to service bundling, pricing and regulations remain. These services will need to attract more subscribers in the coming year in order to continue to be a viable option for consumers," according to analyst Cindy Wolf. She believes increased broadband adoption rates will help drive such services forward.

In its annual survey of US homes, the report's authors found that the percentage of respondents owning digital audio players increased from 15.5 percent in 2001 to 20.3 percent in 2002. SonicBlue leads in terms of units shipped.

This could be good news for the makers of the iPod, as despite denying plans to buy up Universal Music Group, Apple is rumoured to be preparing to launch an online music download service as well as revisions to its popular digital audio player line-up early next week.