iPod Killers?

BusinessWeek, April 25, 2005
Music is about to hit North American cell phones in a really big way. In Europe and Asia, cell phones are already well versed in MP3 playback -- but in the large North American market, they've had only a passing interest from mobile carriers. That's about to change however. The music industry and mobile carriers are teaming up to deliver music downloads directly to cell phones that are about to become the new digital jukeboxes. Every large mobile carrier is busy at work on their music stores, and the major labels, having missed the boat on the internet, are quickly reading their catalogs for the cell phone market.

iPod and iTunes have been the most successful digital music foray, but consider the numbers: there are 1.4 billion people with cell phones, and to date, only 10 million iPods have been sold. The iPod can hold 60GB of music -- your entire music collection; but Samsung already has a 3GB phone on the market and is developing a 10GB version. How long will it be before they hit 60GB as well? Cell phones also have the advantage of readily available downloads, while on the run -- whereas with the iPod, you have to connect to your computer. Increasingly as well, the ringtone market is also becoming more important. Artists are readying ringtone versions of their hits in conjunction to their regular releases.

In defense of the iPod however, the mobile and music industries does have a few things to learn. 1) Nothing beats cheap or free. Xingtones can transform your MP3s to ringtone format. Why buy ringtones when you don't have to? 2) iTunes is cheap at 99-cents a song. The mobile industry has been stealing money from their customers, charging $2 per ringtone, and with plans to charge $2-3 for song downloads. 3) Songs download to a cell phone can't be transferred to another device -- other than maybe another cell phone, and then, it might cost the user after the first couple of plays. 4) And lastly, who really need to have their entire music collection on their cell phone? Already, cell phones have had a huge antisocial impact. Do we really need this? Like it or not, it will be sold to us, but we don't have to buy it.

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