According to analysis by Mintel, the research company, sales of MP3 players fell by almost 110 million pounds, or 22 per cent, to 381 million pounds this year as compared to 2011.
According to the Telegraph, Mintel predicted that sales will halve again by 2017.
In its 'worst case' scenario, the group forecast that sales of MP3 players could drop to just 25 million pounds within five years.
MP3 players have been usurped by smartphones, which carry out the same functions, and also allow users to make telephone calls and connect to the internet.
The rise of smartphones - like the Apple iPhone or the Samsung Galaxy - has halted the growth of iPods.
Ofcom, the regulator, recently found that two-fifths of UK adults now own a smartphone.
Samuel Gee, a technology analyst at Mintel, said that the decline in MP3 sales is "unlikely to reverse".
Ian Fogg, a technology analyst at IHS, the research company, said smartphones are becoming as ubiquitous as iPods once were, the report added.
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