Ring tone firms see U.S. as next frontier
Several European and Asian sellers are set to take on the U.S. market--a test of whether handsets will ever be used for more than talking.
The blitz in the next few weeks will include some of the biggest names in the ring tone business, an industry that generated $300 million last year in Japan alone. The concept: For as little as 99 cents, cell phone owners can replace their standard ring selection with snippets of tens of thousands of different songs.
The companies involved include Monstermob, Kiwee, based in France, and CellCast, which is among the biggest ring tone sellers in Asia.
The extra minutes of airtime spent getting a sports score or tracking a stock is one of the new revenue sources carriers are hoping for. But so far, they have not had much luck. A recent survey by consultancy A.T. Kearney suggests that while Americans are using cell phones to send each other short text messages, the number of people using a cell phones' Web connection to buy things is plummeting.
In Europe and Asia, cell phones are the primary way to surf the Internet or send text messages. But in the United States, PCs are king. PCs usually stay in one place, while a cell phone accompanies its owner nearly everywhere he or she goes.
"Handsets are an extremely personal device over there," Waryas said. "Here, it hasn't reached that level yet; wireless is still an alternative form of communication, not the primary form of communication."
But the European and Asian companies are coming to the United States anyway. Carl Gunell, president of Telemedia Development in Costa Mesa, Calif., has been readying several of the ring tone companies for a U.S. market just introduced to downloadable ring tones this year.
Gunell says a European market that once saw some companies selling 80,000 to 90,000 ring tones a day has fallen flat in recent months. It is still a huge moneymaking proposition, he said, but the companies need to find a new marketplace.
He said these ring tone companies have also begun to note that U.S. carriers are starting to sell more phones capable of sending and receiving short text messages, which is the primary way ring tones are delivered to cell phones.