Original URL: https://www.theregister.co.uk/2005/09/30/mobiles_aim_at_ipods/

Mobiles challenge iPod hegemony

But do people really want a coffee-making toaster?

By Charles Arthur

Posted in Networks, 30th September 2005 09:54 GMT

"Hello, yes, I'm on the train. We're just about to go into a tunnel... hello? Hello?"

Now that we've sorted out whether anyone will want to download music onto their mobile while travelling, let's move on to the meatier issue: are people going to use them in the manner of iPods to listen to music, and thus replace that and other digital music players - so that our phones become not just machines for making calls and sending texts, but also calendars, address/phone books, stopwatches, video players and music players?

More importantly, will mobile phones turn out to be the iPod-killers that the rest of the music player industry (and some of the music industry) has wished for? Or are they going to remain stuck in the slow lane of the user experience?

The argument trotted out by the mobile phone makers and operators is always the same. Here it is, from Martin Higginson, chief executive of Monstermob, a mobile entertainment company (means: ringtone seller, and would-be more) from Lancaster.

"I think there will always be an iPod, but the fact is there are 1.6bn mobile handsets around the world and only 16m iPods," Mr Higginson told the FT. Well, more precisely, thus far Apple has sold more than 22 million iPods, and if you add rivals' sales you get roughly 30 million MP3 players shipped since their introduction about five years ago. Compare that to the number of people with a mobile phone: close to two billion. Hmm, 30 million vs two billion - who would you think had better odds?

Mr Higginson reckons Monstermob, with a new "Jukebox" service that will let people download an unlimited number of tracks to their phones for just £3 per week, is "on the cusp of regenerating the singles market.. People just don't buy singles any more because a CD singles costs £3. But if you could buy the single easily over the phone for a few pence, they would do it."

Or, as Ed Zander, chief executive of mobile maker Motorola, so charmingly put it, "Screw the [iPod] Nano. What the hell does the nano do? Who listens to 1,000 songs? People are going to want devices that do more than just play music, something that can be seen in many other countries with more advanced mobile phone networks and savvy users." He later said he was being ironic, because someone had kept asking about the Nano, when he wanted to talk about the Motorola ROKR.

Yes, you know, the ROKR - it can store 100 songs, has an iTunes client written by Apple. Oh, come on, have you been living under a rock?

So who will speak up against this proposition? Step forward Apple vice-president and head of the iPod division, Jon Rubenstein. He made his own comment on "converged" devices to the Berliner Zeitung [translation back from German courtesy of babelfish, which charmingly calls him "Ruby Stone"]: "I call it the grand combination theory. Many companies believe in it, but I don't. Look around your kitchen. Do you have a toaster that also brews coffee? There is no such combined device, because it would not do anything better than an individual toaster or coffee machine," Rubenstein argued. "It works the same way with the iPod, the digital camera or mobile phone: it is important to have specialized devices."

However Rubenstein then admits that the biggest manufacturer of digital cameras is Nokia - and insists (despite growing evidence to the contrary) that "most people would still rather take a photo with their digital camera than their mobile phone. And there's a simple reason: digital cameras simply make better pictures."

Yes, well, that's photos. We're trying to talk music. But you know what? The convergence argument is everywhere. You can make it about any function that can be programmed into a phone. Is a mobile phone with an inbuilt phone/address book better than a separate mobile and, say, Palm Pilot? Well, sort of yes, sort of no - if you have more than a couple of hundred contacts, you'll need the Palm. Is a mobile with inbuilt global positioning better than a mobile and a GPS? Maybe; though if you're an orienteer, you'll probably want the precision of a separate handheld. Is the stopwatch on your phone any use for timing races? And does that matter?

So the argument in favour of convergence is actually not about whether people want music facilities on their mobile, rather than two separate devices. It's about whether the majority who want that function will find it more convenient to have the two combined in one body, or kept separate. More people now own cameras than ever before, and more use them. But most of those cameras are in mobile phones. Similarly, more people now own and use electronic phone books on their mobile than ever owned a Palm Pilot.

Is music any different? In the short term, yes. Longer term, it clearly can't be; it's just a function that a phone can do. It doesn't take any more away from the phone's functionality than a camera function.

But initially, the argument that there are loads of mobile phones out there, so of course they'll all be wanting mobile music downloads, doesn't stand up. Why? Because the owners of MP3 players choose to listen to music on the move, and put their money into it. The owners of mobile phones have chosen to have a mobile phone.

Operators might think there must, given a large enough population, be people who'll buy things, but that's not necessarily true either. First, the most easily converted part of their target market is already taken - they bought MP3 players. Second, when people are offered something they don't really want, they will push the price down to zero, or below. Look at how many people you see playing games on their mobiles on public transport. Now, if those games cost money, do you think they'd do that, or instead play sudoku on the back of some discarded freesheet?

Undaunted, the mobile operators have been offering music for download. Let's first see how those services perform, and then look at some of the trickier points of downloads.

Strategy Analytics has just put the UK mobile download services to the test, and the results ain't pleasing. They were compared on speed of portal navigation, download speed, clarity of catalog interface, and portal layout/usability. Orange did best, Vodafone worst, but "all first generation Full Track Music Download services in the UK receive a failing grade on download speeds, price and DRM", noted Kevin Nolan, Director of the Advanced Wireless Laboratory at Strategy Analytics. "Operators must address these key weaknesses in order to realize their visions of mobile music revenues."

Phil Taylor, Strategy Analytics's director of wireless data applications research, added, "Consumers are acutely aware of the limitations of cellular music services in terms of download speed, impact on battery life and device memory, and lack of content portability, not to mention price differentials between cellular and online services such as iTunes. Until operators address these limitations, Strategy Analytics expects very low levels of Full Music Track Download usage via the cellular network."

Visions? Or dreams? The truth is, people will find a way to play music on their phones. It's more convenient, instead of fiddling around with two pairs of headphones, or hoping you hear your phone ring while you listen to music. Most of the phones produced in the past year or so can play MP3s, and even video. Hence stories like this one: the guy got a video off the net and transferred it to his phone (we're guessing Bluetooth).

The harder question: will the music people put on their phones have been bought over the air, online, or just in a normal high street shop?

The safe betting, for now, is the third of those. Here's why.

First, most people haven't bought a song online yet, though word has spread widely enough for them to know it's less than a quid. That will make it very hard for companies such as Monstermob to persuade them to part with £3 per week for something that won't stay on their phone.

Next, most people don't have many digitised songs: the average is 375 (more for iPod owners, fewer for owners of non-iPod MP3 players). That means it's going to be be easy for them to transfer them across from their PC to their phone - Bluetooth's pretty quick if you're not in a hurry.

Third, the cost of music over the air is prohibitive, because of strange licensing by the record labels, and the operators' desire to recoup some of the mad money they splashed out on 3G services, in the belief it would be a huge revenue-generator through highly-desired services like, um, music downloads. Thus it costs £3 to buy a track over the air, you can't be sure the signal won't cut out if you're moving (on a bus, a train, in a car, on the street, walking into a building), it could take a long time to download, and you can't be sure of your backup. So even though Mintel forecasts that eight per cent of the £740m being spent on mobile downloads this year will be on music (as opposed to ringtones), that's a smaller percentage than games, screensavers, gambling and of course ringtones.

It seems a safe bet that people will obviously start moving their owned music collection over to their phones first. That will need software clients to handle them. And although Ruby Stone might not like the idea of a converged device, Steve Jobs isn't so dismissive. The ROKR phone? "We wrote the iTunes software for that phone," said Jobs. "We see it as something we can learn from. It was a way to put our toe in the water and learn something."

Toe in the water? Learn something? But learn what? Surely, how to rewrite iTunes to work on different platforms that people will use to play music. Those are the words of someone who can see which way the devices are moving - into each other. The iPod will stay separate of the phone in your pocket for a little while longer. But soon enough - a year? Two years? - it will be sucked in, just like the camera was, and be just another button in there. Having ported iTunes to the Symbian mobile OS, Apple appears to be moving quickly; there are already credible rumours of a Windows Mobile version of iTunes.

And let's not forget that iTunes, and the iPod, only really took off once it was made available for Windows. An iTunes client that ran on a billion phones... now that's something to get Steve Jobs excited. ®