“Wakeup call for the iPod” (by Li Yuan, WSJ, November 30,
2006: pp. B1 & B3) further expands on my previous posting on 28th
November. This year has witnessed rollouts of phone sets that allow users to
store and listen to digital music on cellular phones. This is an important
development. To put things in perspective, Apple has sold more than 60 million
iPods globally, but there are over two billion cellphone users in the world and
analysts believe that close to one billion cellphones will be shipped in 2006
alone.
impressive sales around the world. Sony Ericsson, a joint venture between
Telefon AB L. M. Ericsson and Sony Corp. has sold 15.5 million Walkman music
phones in a 14 month period ended in September. Motorola Inc., in its third
quarter earnings call, stated that it shipped 15 million high quality music
phones in 2005. Nokia Corp., the world’s largest handset makers aims to sell 80
million music phones in 2006, making the company the world’s largest
manufacturer of digital music players. Cellular phone service companies have
tied up with multiple music phone models. For example Cingular Wireless has 18
music phone models available, including two Walkman phones from Sony Ericsson,
a Smartphone called Blackjack from Samsung and three Motorola phones that play
iTunes tracks. Verizon Wireless is marketing music phone called enVy by LG and
Chocolate.
phones can either tap into iTunes music store, which feature 3.5 million tracks
(e.g. the three Cingular phones from Motorola) or they can tap from their own
offerings. For example, Spring Music Store offers one millions songs and
Verizon’s proprietary music service called V Cast Music has 1.5 million songs. Cingular
has partnerships with Napster, Yahoo Music and eMusic, which provide access to
two million tracks. These songs are typically offered on a dual delivery basis,
whereby one copy can be stored on the phone and another copy can be stored on
the computer. Phone users that have downloaded iTunes music can either use
iTunes phones from Motorola or format iTunes tracks into non-iTunes music files
with special software that can be downloaded for free. The addition of a 1GB
memory card to the phones allows a user to store up to 1000 songs.
don’t provide such as wireless downloading. Verizon Wireless and Cingular
provide a feature where the user can hold the phone up to a speaker playing a
song and then match the song against their music database. The user can then
buy the song if available in the database. Rumors and speculations in the industry
suggest that Apple is also aiming to launch such devices. As an example,
earlier in November 2006 The Commercial Times in
iPod phones from Hon Hai, a Taiwan-based manufacturer that makes iPods. It is a
matter of time to understand the scope of Apple’s strategy and the direction
that the digital music industry will take.