Is the time right for phone-music player hybrids?

Analysts say 50 percent of digital music players hold fewer than 100 songs, which is just about how many the new iTunes phone will hold.

As Apple Computer and Motorola unveiled an iTunes phone Wednesday, analysts were debating whether the time was right for more mobile phone-digital music player hybrids.

Mobile-phone customers are already consuming music on their handsets. Nokia's N91, Samsung's SGH i300 and Sony's Walkman W800 are examples of handsets that play digital music files.

A phone may be limited to storing about 1,000 songs now--as much as 4 gigabytes of music storage is available in the N91 handset--but that's expected to grow dramatically as larger flash memory becomes available and as phones begin incorporating high-capacity micro-hard drives, which currently support 6GB of storage.

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Current habits regarding the storage of digital music suggest that the marriage of mobile phones and digital music players makes sense, according to a study by Solutions Research Group.

Even though some standalone players can hold as many as 15,000 songs, the average user of a high-capacity digital music device stores only 375 songs, the study found. One out of every four players holds between 100 and 499 songs, while 25 percent have 500 songs stored on them. Half of those surveyed said their digital music player holds fewer than 100 songs. That's a good sign for the phone unveiled by Motorola and Apple , which should store about 100 songs.

Owners of Apple's iPods have significantly larger libraries--504 songs on average--compared with owners of other digital music players, with 246 songs, the study said.

The Solutions Research Group study was based on 1,062 random interviews the group conducted in the United States via telephone in May and June.

In a recent Forrester survey, 78 percent of online consumers age 18 and older said they had no interest in using their cell phone to play back audio tracks. Only 13 percent of online consumers ages 12 to 17 said they were interested in such a feature.

Despite the popularity of the iPod, the public still may need some coaxing in downloading songs. Only 22 percent of those who own digital music players bought a song online at some point in the past, suggesting that a majority of the music on the devices comes from owners' CDs and from peer-to-peer, file-sharing sources, Solutions Research Group found.

But that may change if Apple and Motorola launch a media blitz to convince the public that there is an advantage to owning a phone that merges iPod technology.

"Apple could offer a special on downloading songs from iTunes with the purchase of a cell phone and the plan," said Tim Deal, an analyst at Technology Business Research. "Clearly, we are talking about a computer-based solution using iTunes and not a download service via the carrier. Apple wants to make sure that the business model works first, before it develops its wireless world."

And teaming with Cingular may provide the market sweet spot Apple and Motorola are looking for. According to Solutions Research Group, 14 percent of Cingular's customers have a digital music player. A larger proportion, 17 percent of those surveyed, report that they want to buy one within 12 months, the report said.

 

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