Developers see bright future for ringtone apps

The iTunes 7.4 update might have heralded Apple’s entry into the ringtones business. But third-party developers who offer ringtone creation tools of their own think there’s enough room for more than one application—even one that comes directly from Apple.

Introduced by Steve Jobs earlier this month, iTunes 7.4 adds a customized ringtone maker to Apple’s music jukebox software. With the new feature, users can turn selected purchased from the iTunes Store into ringtones; creating a ringtone costs 99 cents on top of the cost of the original download.

While the iTunes 7.4 feature works with some songs bought through iTunes, it doesn’t work with all the music in your library. And that’s where third-party developers see an opportunity to compete alongside Apple.

“Apple is limited in terms of what they are offering," said Andrew Welch, whose company, Ambrosia Software, makes the iToner ringtone creator. “The reason people want to personalize their phones is that they want to make it very specific for them.”

Having a personalized ringtone doesn’t necessarily mean it has to be made from a song. A ringtone could be a clip from a TV or movie theme, or even sounds users make themselves. That makes the ability of third-party applications to load any ringtone an invaluable asset to consumers.

And users seem to be responding. While Ambrosia hasn’t said how many copies of iToner have sold since its introduction, Welch said the iToner Web site had 200,000 unique visits in its first two weeks; Ambrosia had to up its bandwidth to handle the download traffic.

Indeed, the toughest challenge facing third-party ringtone makers may not be drumming up interest in their product but in making sure their software stays compatible with the iPhone even after software updates. Take iToner, which had its custom ringtones disappear from the iPhone after the iTunes 7.4 update. (Ambrosia released an update a day later that restored compatibility.)

Tunji Afonja, president of Efiko Software, concedes that software updates could be aimed at breaking applications like the Windows-based iPhoneRingToneMaker developed by his company. “But we believe that’s not in the best interest of the users,” he added.

Welch agrees: “Apple will be treading on thin ice if they intentionally try to break products. Users have the right to put on the iPhone what they want.”

Of course, when Apple updates its software, some third-party applications do get broken —that is part of doing business, no matter what operating system a company is developing for.

iToner is not using any kind of hack to interact with the iPhone, which is what caused problems for some of the other ringtone applications. When Apple released an update to the iPhone, the phone had to be completely reset, which erased all the hacks. Welch said iToner users don’t have to worry about that.

“The way we are doing things with iToner, I am positive it will continue to work,” said Welch. “It’s almost inconceivable that Apple could do something that would break us for good.”

The recording industry may be another matter. Unlike Apple, which is charging consumers on a per-ringtone basis, programs like iToner and iPhoneRingToneMaker let users make ringtones out of anything in their library without any additional cost beyond the $15 both software makers charge for their apps.

The Recording Industry Association of America declined to comment when asked for its position on ringtone makers. However, record companies may not look too kindly on applications that circumvent users paying for a ringtone. In 2005, ringtones were estimated to bring in $2 billion annually for the record companies.

Ambrosia’s Welch said he’s not concerned about how record companies may perceive the use of iToner to load ringtones onto the iPhone. “They have no basis or standing,” said Welch. “If I buy a CD, I’m well within my rights to take a snippet and make a ringtone.”

Afonja agrees. “We understand for Apple it’s a business opportunity and we respect that,” he said. “At the same time, consumers should have a choice—it’s their right to produce ringtones from songs that they purchase.”

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