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3GSM has just started, and it already looks like one primary theme will be about how to combat Apple's iPhone. Throw a major contender in the mobile music space and suddenly the world's mobile operator community comes to its senses about how to spur customer demand for mobile music.
A U.K. startup called Omnifone announced today an all-you-can-eat, over-the-air full track music download service called MusicStation. It has 23 European and Asian mobile operators already committed to using the service, and all four major music labels have agreed to release their digital music catalogs to the service.
Remarkably, the operators have agreed to brand the service MusicStation, regardless of who is offering the service and to promote it quite strongly, even taking out TV ads to counter Apple's marketing efforts. Pricing will range between 2 euros and 3 euros a week for unlimited song downloads to a wide range of 2.5G and 3G phones. It's unclear what the pricing will be in Asia.
Pricing has been one of the major roadblocks to customer adoption of mobile music services. A recent survey of some 3,000 people by Entertainment Media Research, a leading music research firm, found that while the iPod/MP3 player music market remains unsaturated, only 11 percent of those questioned actually pay to download music onto their mobile phone. According to the research firm, the figure represents a drop of 50 percent from 2005.
Around 25 percent were even interested in mobile downloads. Less than 5 percent said they were "very likely" to start mobile downloading while 44 percent said that they were very unlikely to do so in the future. Another 36 percent said they prefer to download music onto their PCs. So much for the advantage of immediacy the mobile industry thought it had to justify charging a significant premium for over-the-air downloads. It was becoming clear that consumers probably wouldn't care much if they had to download songs from their PC to their cool new iPhone.
So now the theory with MusicStation is that when consumers walk into a retail store looking for an iPhone, the salesperson can excitedly say, "We don't have one, but look at all of these other cool phones that can give you an experience like iPhone."
There's just one critical element missing in that scenario--the actual iPhone device. While there will be many iPhone look-alikes coming to market before the real one does, it's clear that the iPhone will reinforce what the iPod has already proven to handset vendors: That people want a stylish and functional mobile device with the iPod name associated with it. -Lynnette
Comments
Posted by Anonymous | February 12, 2007 - 4:12pm
First you survey is flawed by the questions asked. Your basing likelihood on present carrier cost to download. I wouldn’t be likely to do it either If I had a all you can eat by week by month service sure myself and a % of the devices that can store and play I would guess at 20-30% of these are likely to download based on cost, and Music and or content that they presently do not all ready own.
Posted by Brendan | February 13, 2007 - 2:05am
It's not the iPod association which people like, it's the Apple brand association. And I don't believe it is entirely for superficial reasons. Firstly the reason the iPod is such a success is because it's easy to use, and the computer software it ties in with (iTunes) was designed with humans in mind. That's what attracts people to Apple products, especially the iPod. And the other reason is the device itself, it has basically no buttons, the UI is amazing, and the software functionality is amazing too. The way the phone looks is a bonus, a sexy bonus.
I believe the above is what the other phone brands fear, not to mention some people expect Apple to be releasing a smaller toned down iPhone before the end of 2007 too; think iPhone junior.
Posted by JohnHighTide | February 13, 2007 - 4:24pm
I agree with Brendan about the "UI is amazing" comment about the iPhone.
I don't think you can over emphasize the ease-of-use aspect of the Apple products. In my opinion this is a key to understanding what is frightening the other manufacturers and carriers in this space. I have a table full of phones that I test on and it is amazing how hard they are to use and how poorly thought out the interfaces are. I think this (iPhone) will be a well needed wakeup call to the industry that things can be done better.
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