One of the great puzzles of gadgetry goes thusly: Why are portable CD players outselling digital audio players three-to-one? No, that’s not a misprint—for every American who bought an iPod or Dell Jukebox in 2004, three of their countrymen bought a descendant of the 21-year-old Discman.His answer encompasses many things. First, not as many people as you think are into MP3s. A lot of people don't want to be bothered with ripping CDs or futzing around with a personal computer. It's cumbersome and technical and lots of people don't like it. So they stick to the CDs they know. It's what their old music collection is on and they don't have to rip or pay to get music in the new format.
Second, price. You can purchase a plain jane CD player for as low as ten dollars. You can purchase one with MP3 and WMA capabilities for perhaps twice that. Even cheap flash MP3 players start at around $30 and those are the 32 MB ones that can only hold half a CD. So MP3 players are comparitively expensive in the absolute sense.
It gets worse if you consider capacity/dollar. You can get over 20 megabytes of memory per dollar with the CD player. You don't start tipping the scales in the MP3 player's favor until you move to the ~$200 multi-gigabyte hard drive based units like the iPod or Zen Micro. That's more than I really want to spend.
Is it hard to see why they're outselling the competition? They still make good sense.