Music Phones Remain Underutilized

JupiterResearch Forecasts Nearly 30 Million to Have Music Phones By End of Year; Few Will Take Advantage of Capabilities

JupiterResearch, a leading authority on the impact of the Internet and emerging consumer technologies on business, has found that although US consumers are continuing to acquire music-capable mobile phones, only few take advantage of those capabilities. According to a new report, “Mobile Music: Target Impulse Purchases and Purchasers for Over-The-Air Downloads,” only about five percent of consumers report sideloading songs onto their phone (i.e., transferring digital songs from a PC to a phone), and only two percent report downloading songs over the air. Thus, although some 27.9 million US consumers are expected to have music phones by the end of this year, the music functionality of the phone will remain significantly underutilized.

Carriers potentially face significant hurdles including resistance to initially high price points for over the air (OTA) downloads, prevalence of existing portable devices, and compromises in device functionality to combine phone and music capabilities. Even the long-anticipated release of Apple’s iPhone later this week will probably not serve as the catalyst for mass adoption of music phone capabilities.

“While the iPhone could raise consumer awareness of, and interest in, music phones from other manufacturers and mobile operators, it is more likely to attract a unique market segment, hard for competitors to emulate,” said Joe Laszlo, Research Director at JupiterResearch. “Apple fans and status seekers will rush out for a first generation iPhone; music fans will probably wait a while.”

To drive usage, as opposed to simply ownership, of music phones, carriers, handset makers, and the music industry must do more to make the case that music capabilities integrated into handsets deliver real consumer benefits. Reaching out to the 20 percent of consumers who buy music impulsively, and integrating features like mobile fan communities and song identifiers will be key to prompting consumers to try, and eventually buy, music on their mobile phones.

“Despite strong industry interest in music on mobile phones, adoption remains in its earliest stages,” said David Schatsky, President of JupiterResearch. “It isn’t the type of activity that can be forced into the marketplace, but it is something that should be nurtured in those who have already embraced it.”

The complete findings of this report are immediately available to JupiterResearch clients online at http://www.jupiterresearch.com. For details on JupiterResearch’s methodology, visit http://www.jupiterresearch.com/bin/item.pl/methodology or email press@jupiterresearch.com to request a detailed methodology statement. For additional information on this report or JupiterResearch’s Music research service, visit http://www.jupiterresearch.com or contact Kieran Kelly, Senior Vice President of Global Sales and Client Service, at 1-800-481-1212 or researchsales@jupiterresearch.com.

About JupiterResearch
JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging consumer technologies on their business. The company helps online businesses make critical decisions about technology selection, spending, staffing, and Web site effectiveness; advises consumer-facing companies with online advertising, marketing, and customer service strategies to understand, attract, convert and retain customers; and guides technology vendors and service providers on market opportunity, positioning, product definition, and pricing. JupiterResearch is headquartered in New York City and has offices throughout the US and Europe. For more information, visit http://www.jupiterresearch.com.