3GSM: Phone makers hope to play in music market
Wherever you turn at trade shows, there's always a stand with blaring music, and the 3GSM World Congress in Cannes was no exception this week. However, this time the music was not only accompanying the announcements: it was headlining.
Mobile phones have been able to play music for over a decade, if you count the ringtone that must by now have interrupted a million theater performances and PowerPoint presentations, Nokia Corp.'s signature "Grand Valse." Selling replacement ringtones has been a lucrative business for perhaps half that period, and since around 2001, phones have been able to play music you actually want to hear, too. Now, however, phone manufacturers and network operators are looking at how they can make money out of music.
Nokia, for example, at the show struck a harmonious chord with Microsoft Corp., long a bitter rival in the market for mobile phone operating software. Future smart phones running Nokia's Series 60 software will be able to play music in Microsoft's Windows Media Audio digital music format. Nokia will also include support for Microsoft's copy prevention system in the phones. The move will enable Nokia to sell music protected by Microsoft's DRM (digital rights management) technology through an online music store it is building for mobile network operators in conjunction with Loudeye Corp.
Sony Ericsson Mobile Communications AB kept show-goers in suspense, saying it will not unveil its new range of music-playing phones until March -- but it did reveal that they will be sold under the Walkman brand, already used by one of its parent companies, Sony Corp., on over 340 million portable music players over the last 25 years. Loading music onto the Walkman-branded phones will be as simple as copying it from your CD collection, or downloading it directly from Sony's Connect online music store, Sony Ericsson President Miles Flint said. The phones will play open music formats such as MP3 and AAC (Advanced Audio Coding), Sony Ericsson said. Sony is moving towards use of OMA (Open Mobile Alliance) DRM to prevent unauthorized copying of tracks downloaded from its Connect service.
Playing DRM-protected tracks requires sophisticated software, and implementing this is stopping smaller manufacturers from introducing music-playing phones, according to German company Secure Digital Container AG (SDC). On Monday, SDC announced a partnership with Java virtual machine (JVM) developer Tao Group to make it simpler to link SDC's Java Music Player for mobile phones with Tao's JVM. The software bundle will be used on the XDA II smart phone, the companies said.
Sendo International Ltd. unveiled its Sendo X2 phone, which will begin playing music with one touch of the "play" button, the company said. The phone plays music in MP3 and AAC formats, and can hold up to 1G byte of tunes on removable miniSD memory cards, the company said.
French mobile phone network operator Orange SA, meanwhile, has formed a joint venture with the French music TV channel M6 to create a mobile virtual network operator (MVNO) for the French youth market, M6 Mobile. Orange will add five TV channels from M6 to its Orange Video mobile portal, and the companies plan a number of other special offers for subscribers. The MVNO will launch in June, aiming to have 100,000 subscribers by the end of the year and 1 million within three years.
Albert Lin, an analyst at American Technology Research, was dismissive of the importance of the announcements, suggesting there was too much hype.
While mobile phones with cameras have swept away the market for separate digital cameras, "Music-playing phones will not replace the stand-alone music player market," he wrote in an e-mail commenting on the announcements.
At least, not this year: For now, there are too many technological and commercial obstacles to overcome, but the market will be more viable in 2006, Lin said.
Music playing won't take off the same way as picture taking because consumers can't generate their own content as easily, Lin said. The market for music is also more fragmented. Photography is all about JPEG files, while music is available in many incompatible formats.