Mobile providers dancing to the tune of the iPhone

10 December 2007
Mobile phone providers are learning the secret of Apple's success as the rise of digital music has hoisted the iPhone to the top of the game since it stormed into the market this year.

Consumers are expecting more than just phone calls and text messages from their mobiles these days – the medium of music is proving to be a most popular and lucrative development in the mobile phone industry and other companies are having to work hard to keep up with Apple which has significantly raised the bar.

By 2010, mobile phone users worldwide will be spending more than $32 billion a year on downloading music to their handsets, compared to $13.7 billion in 2007, according to forecasts from Gartner Inc, a US-based information technology research company.

Traditional mobile phone providers are wary of the iPhone, harnessing growing concern that the newcomer will dominate the market and subsequent valuable revenue. An entire album can now be downloaded in less than a minute, ending the days of inadequate handsets and slow downloading times, which, experts say, were holding the arena of digital music back and preventing it from reaching its potential.

Stephanie Pittet, principal research analyst at Gartner, said: "The mobile phone has become the device that people carry everywhere, in all circumstances. Over-the-air downloads mean that people no longer have to be at a desk to plug in the device.

"Billing via a mobile phone is secure and easy, and for operators, it is easy to target customers with personalized content because one mobile phone SIM card is used by one person most of the time."

While in some ways the rise of digital music is damaging more traditional methods of selling music, the music industry is giving it its support if it means there will be some compensation for a massive fall in CD sales.

"The mobile platform is an enormous part of the future of the music business.", Edgar Bronfman, Chairman and CEO of Warner Music Group, said when he addressed the GSMA Mobile Asia Congress in November, and he believes that "music is crucial to the future of the mobile industry."

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