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Mobiles challenge iPod hegemony

But do people really want a coffee-making toaster?

So the argument in favour of convergence is actually not about whether people want music facilities on their mobile, rather than two separate devices. It's about whether the majority who want that function will find it more convenient to have the two combined in one body, or kept separate. More people now own cameras than ever before, and more use them. But most of those cameras are in mobile phones. Similarly, more people now own and use electronic phone books on their mobile than ever owned a Palm Pilot.

Is music any different? In the short term, yes. Longer term, it clearly can't be; it's just a function that a phone can do. It doesn't take any more away from the phone's functionality than a camera function.

But initially, the argument that there are loads of mobile phones out there, so of course they'll all be wanting mobile music downloads, doesn't stand up. Why? Because the owners of MP3 players choose to listen to music on the move, and put their money into it. The owners of mobile phones have chosen to have a mobile phone.

Operators might think there must, given a large enough population, be people who'll buy things, but that's not necessarily true either. First, the most easily converted part of their target market is already taken - they bought MP3 players. Second, when people are offered something they don't really want, they will push the price down to zero, or below. Look at how many people you see playing games on their mobiles on public transport. Now, if those games cost money, do you think they'd do that, or instead play sudoku on the back of some discarded freesheet?

Undaunted, the mobile operators have been offering music for download. Let's first see how those services perform, and then look at some of the trickier points of downloads.

Strategy Analytics has just put the UK mobile download services to the test, and the results ain't pleasing. They were compared on speed of portal navigation, download speed, clarity of catalog interface, and portal layout/usability. Orange did best, Vodafone worst, but "all first generation Full Track Music Download services in the UK receive a failing grade on download speeds, price and DRM", noted Kevin Nolan, Director of the Advanced Wireless Laboratory at Strategy Analytics. "Operators must address these key weaknesses in order to realize their visions of mobile music revenues."

Phil Taylor, Strategy Analytics's director of wireless data applications research, added, "Consumers are acutely aware of the limitations of cellular music services in terms of download speed, impact on battery life and device memory, and lack of content portability, not to mention price differentials between cellular and online services such as iTunes. Until operators address these limitations, Strategy Analytics expects very low levels of Full Music Track Download usage via the cellular network."

Visions? Or dreams? The truth is, people will find a way to play music on their phones. It's more convenient, instead of fiddling around with two pairs of headphones, or hoping you hear your phone ring while you listen to music. Most of the phones produced in the past year or so can play MP3s, and even video. Hence stories like this one: the guy got a video off the net and transferred it to his phone (we're guessing Bluetooth).

The harder question: will the music people put on their phones have been bought over the air, online, or just in a normal high street shop?

The safe betting, for now, is the third of those. Here's why.

First, most people haven't bought a song online yet, though word has spread widely enough for them to know it's less than a quid. That will make it very hard for companies such as Monstermob to persuade them to part with £3 per week for something that won't stay on their phone.

Next, most people don't have many digitised songs: the average is 375 (more for iPod owners, fewer for owners of non-iPod MP3 players). That means it's going to be be easy for them to transfer them across from their PC to their phone - Bluetooth's pretty quick if you're not in a hurry.

Third, the cost of music over the air is prohibitive, because of strange licensing by the record labels, and the operators' desire to recoup some of the mad money they splashed out on 3G services, in the belief it would be a huge revenue-generator through highly-desired services like, um, music downloads. Thus it costs £3 to buy a track over the air, you can't be sure the signal won't cut out if you're moving (on a bus, a train, in a car, on the street, walking into a building), it could take a long time to download, and you can't be sure of your backup. So even though Mintel forecasts that eight per cent of the £740m being spent on mobile downloads this year will be on music (as opposed to ringtones), that's a smaller percentage than games, screensavers, gambling and of course ringtones.

It seems a safe bet that people will obviously start moving their owned music collection over to their phones first. That will need software clients to handle them. And although Ruby Stone might not like the idea of a converged device, Steve Jobs isn't so dismissive. The ROKR phone? "We wrote the iTunes software for that phone," said Jobs. "We see it as something we can learn from. It was a way to put our toe in the water and learn something."

Toe in the water? Learn something? But learn what? Surely, how to rewrite iTunes to work on different platforms that people will use to play music. Those are the words of someone who can see which way the devices are moving - into each other. The iPod will stay separate of the phone in your pocket for a little while longer. But soon enough - a year? Two years? - it will be sucked in, just like the camera was, and be just another button in there. Having ported iTunes to the Symbian mobile OS, Apple appears to be moving quickly; there are already credible rumours of a Windows Mobile version of iTunes.

And let's not forget that iTunes, and the iPod, only really took off once it was made available for Windows. An iTunes client that ran on a billion phones... now that's something to get Steve Jobs excited. ®

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