Music Phones Outsold MP3 Players in 2007

Report Buyer, the online destination for business intelligence for major industry sectors, has added a new report showing that the worldwide unit shipments of music phones exceeded a billion units in 2007, outnumbering shipments of personal media players like the iPod by almost 300 million units.

Wanted: Multimedia Handsets Consumer Desires Meet Operators ARPU Needs reports that by 2011 over half of all the 941 million phones shipped will be considered music phones. The authors of the report define a music phone as a phone with two features: (1) Music codec functionality: MP3, AAC, etc. and (2) a memory slot which allows for a full featured music experience by allowing the user to carry a personal music library. This is only possible with expandable memory.

The report shows that voice commoditisation and falling voice Average Revenue Per User (ARPU) are driving a shift in wireless operators to focus on data revenue models and services. Music has been the first important factor for the operators to drive the consumption of premium content on the handset. As polyphonic ringtones gave way to realtones, operators found consumers desire to personalise their handsets as a way to enhance ARPUs. The report further shows that music companies discovered a way to sell a form of music which was less susceptible to piracy and provides incremental revenue.

However, authors of the report note that realtones are but one form of cellular music enjoyed. As the ringback tones, full track downloads and streaming music markets join the ringtone market, the mobile music market promises to hit over US$6 billion in 2008. With such significant revenue and customer demand at stake, the operators and handset providers concerted efforts to use music as a central part of their handset strategies.

The report provides research, analysis and forecasts for music phones, multimedia handsets and handsets with multimedia specific features such as phones with touch screens, camera phones, mobile TV handsets, radio phones, and phones with a host of alternative connectivity options.

Report Buyer product ID: MMI00002

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