January 9, 2007, 12:00 AM

Digital music downloading is not yet phone-y

While the number of mobile phones with the ability to purchase, store and play digital music has dramatically increased, few consumers with these phones are wirelessly buying into the mobile phone music scene.

Kurt Peters

Executive Editor

 

While the number of mobile phones with the ability to purchase, store and play digital music has dramatically increased, few consumers with these phones are wirelessly buying into the mobile phone music scene.

While many wireless telecommunications subscribers report loading music onto their phones via their PCs, only a small number have actually conducted m-commerce, downloading music over the air from a wireless carrier’s music store, says Telephia Inc., a mobile and telecommunications research firm. During the third quarter of 2006, a little more than 2 million subscribers, about 8.5% of those with phones able to wirelessly purchase digital music, reported purchases of music via wireless downloads.

At the end of the third quarter of 2006, there were 23.5 million mobile telecommunications subscribers in the U.S. who have phones with integrated music players; the number of consumers with music-enabled phones is up five times from the same period in 2005, according to Telephia research. And nearly 20% of new phones purchased in Q3 2006 were capable of m-commerce for music and other wireless shopping.

“It is still early days in the market for over-the-air music purchasing, and carriers are experimenting with pricing models and working to improve the user experience,” says Kevin Burden, senior manager of mobile devices at Telephia. “Clearly, the ability to facilitate impulse music purchasing will allow the wireless music stores to capture some portion of the larger digital music market. The only question is how big a piece they will get.”

Mobile phones with integrated music players have been in the U.S. market for more than two years and have gone through substantial improvements in memory capacity, file format capability and sound quality, Telephia says. Nearly all of the major device manufacturers, the firm adds, are featuring music-capable phones as an important part of their current products.

 

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