It may not be the allegations that factory workers making
iPods in China are treated like battery hens: It may not be that Creative
invented iPod navigation first: It may not even be European countries insisting
iTunes abandons its anti-competitive music downloads, or the launch of offerings
like the MusicGremlin that mimics the iPod/ITunes product/service mix, but
ultimately you get the feeling that the iPod's time is almost up.
IDC has just released its latest report on the mobile music
industry. In it the researcher points out that wireless mobile music downloaders
could overtake online music service users by 2010.
Why? The mobile phone.
Let's face it, who wants to carry around multiple mobile
devices? Nobody! And once the phone manufacturers manage to crack the quality,
navigation and storage issues holding them back on the music front, the iPod is
toast. Cupertino
better be working on an iPhone or it will be left behind trying to maintain an
hegemony based on iTunes.
Sure an iPod phone might have a chance. If Apple can get the
phone part right, but we suspect putting a good quality phone in the iPod is
going to be harder than putting a decent music player in a cell phone.
Either way its a dead certainty that single use device just
won't cut it in the long run and music download service on mobile phones make a
lot more sense for a mobile music player that plugging into a PC or Mac to get
your songs.
IDC admits that the adoption rates are low today, but forecasts
that in the U.S.
wireless music services will have over 50 million users and generate more than
a billion dollars in revenue in 2010, just 5 years after appearing in late
2005.
"By the end of this year, the number of U.S. OTA (Over
The Air) customers will be approximately half that of online music service
users, but may surpass them by the end of the forecast period," says Susan
Kevorkian, program manager, Consumer Markets: Audio.
The survey the researcher conducted found that a total of
22% of respondents indicated they would buy at least one track from their
service provider within the first three months of availability, assuming they
had an appropriate handset.
Eight percent of respondents age 25-44 indicated they would
buy four or more tracks. It's this 25-44 age group that IDC analysts believe
could be the core base of wireless over-the-air service users, in particular
those who may be new to digital music services.
When you look at the price people are already willing to pay
for ring tones, which in Australia run at around $5 compared to the music
download services which charge less than $3 per track (IDC predicts US$2.00),
it's a no brainer. It all comes down to the handset manufacturers coming up
with the right devices.
That may not be that easy if you consider the malaise that
greeted Motorola's first attempt at an iTunes phone. But an iTunes version of
the RAZR is about to hit the US
market which might make things a little more interesting. The RAZR is a nice
phone, but will still be hampered by a 100 or so song limit and limited audio
quality (we suspect) compared to an iPod.
But there's a host of contenders for the mobile music phone
crown, Nokia and Samsung both have some nice music phones out there and in
Australia at least the growing acceptance of 3G networks is making multimedia
handheld computers (as Nokia would have us call them) are finally gaining
traction.
IDC points out that the shift towards a greater variety of
music-enabled mobile phones at various price points is already in motion. IDC
expects music-enabled mobile phone shipments to reach nearly 60% of all
handsets shipped in the U.S.
by 2010.
All this could come together to shake down the online music
download business if the "mobile storefronts are well-designed and offer a wide
selection of music, and the music listening experience on the device is
comparable to MP3 players," says Lewis Ward, IDCs research manager,
Wireless and Mobile Communications: Entertainment.
And on that subject, a piece of news coming out of the recent
Computex expo in Taipei revealed that graphics company Nvidia has decided to
tackle mobile audio, specificially on Windows Mobile devices.
While much of the high profile R&D in the phone business
is about data, size or displays, audio is getting a look in as well with Nvidia
starting a push of its own in the mobile device arena.
Its latest processor designed for cell phones, has just been
beefed up with cutting edge audio. The company is pitching a 200 MHz graphics
processor support for 10-megapixel cameras and a 24-bit audio engine - all on
the one chip.
Nvidia processors are already used by Samsung among others,
but the support for Windows Mobile 5.0 is part of the source of all the Microsoft
iPod killer rumours doing the rounds during the show. Nvidia has put together a
developer kit including the hardware and software to help engineers quickly cram
multimedia powerhouses into handheld devices, so any Microsoft attack on the iPod
is likely to come from multiple vendors rather than one killer device.
And all the smart money is on a device/service offering on
the basis that it was the iPod + iTunes tie up that propelled Apple to mobile
music fame. Well that particular customer lock-in gambit has been played out
once and it seems unlikely to us that punters would fall for it a second time.
Windows protected content services in Australia were
available well before iTunes and it didn't stop iPod becoming the music player
of choice and it apparently didn't help Creative much in selling devices.
However, there is one customer lock in strategy that works
pretty well... two year phone contracts that subsidise expensive handheld multimedia computers.
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