China's MP3 player sales dipped more than 40 percent in the first half of this year because of a market glut, said a consulting agency on Sunday.

A total of 2.51 million MP3 players were sold at home in the first half, 43.76 percent fewer than the same period last year, the Beijing-based CCID Consulting said in a report.

The sales totaled 1.22 billion yuan ($174 million) in value,down 43.56 percent year on year.

"The market in big cities is close to saturation, which resulted in the negative growth in sales volume," said consultant Li Ying from the CCID Consulting's Consumer Electronics Industry Research Center.

"Meanwhile, the falling cost and prices due to throat-cutting competition led to the decline in sales value," said Li.

After a sales boom from 2002 to 2007 in major cities, rural areas and smaller cities in less-developed central and western regions would become the next promising markets, according to the report.

"First time purchase would drive the sales in those regions," said Li.

In the past six quarters, low-end MP3 players with prices below 400 yuan per unit took a market share of more than 40 percent, while flash-type players, which have a smaller capacity but easier to carry than the hard-disk type, dominated the Chinese market, according to the report.