First, there were musical ringtones. Then came "ring-back" tones -- tunes that
play while a caller waits for someone to pick up a mobile phone. Now cell phones
are offering streaming music, with access to online music stores on the way.
The wireless industry is making a big push into the music business, taking cues
from Apple Computer Inc.'s iPod and from its own success selling more that 182
million mobile phones.
Verizon Wireless said this week that it would offer a music-store service and a
music-player cell phone around year-end. Cingular Wireless LLC is considering a
similar deal with Motorola Inc. and Apple's iTunes music store; Napster Inc. and
Swedish phone maker Ericsson plan a similar joint venture. In December, Sprint
Corp. launched a music channel service that streams commercial-free music and
music videos, and it plans to work with Sirius Satellite Radio Holdings Inc. to
offer more music channels by the end of the year.
"Apple really pioneered digital music and has created such success that
everyone's eyeing it and wants a piece of it," said Darcy Travlos, an analyst
with market-research firm CreditSights. But there are pros and cons to making
cell phones multitask as music players.
The primary appeal of the cell phone is its ubiquity; nationally, more than 60
percent of people carry a cell phone, making the potential audience huge. The
success and profitability of other add-on functions, such as picture messaging,
ringtones and various entertainment services, is bolstering the case that the
cell phone could become the Holy Grail of consumer electronics: the all-in-one
"I strongly believe people will use cell phones as their multipurpose tools, and
one of the most logical choices for that is music," said Roger Entner, an
analyst with research firm Ovum who said he recently observed teenagers on
Boston's subway system playing loud music on their cell phones.
Last year, ringtones generated $400 million in sales in the United States, and
the total will reach $600 million this year, he said. "I see all the success of
all the MP3 players . . . [and] they beg to be integrated into something that is
already providing a great level of utility. Cell phones will do to the music
market what they have already done to the camera market."