Music Phones Surpass ½ Billion Units in Shipped in 2007, Making It the Dominant Portable Music Device, According to MultiMedia Intelligence

Posted Monday, March 24, 2008

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MultiMedia Intelligence reports the worldwide unit shipments of music phones exceeded ½ billion units in 2007, outnumbering shipments of personal media players like the iPod by almost 300 million units. In 2011, over half of all mobile phones can be considered music phones with 941 million units shipped. MultiMedia Intelligence defines a music phone as a phone with two features: (1) Music codec functionality: MP3, AAC, etc. and (2) memory slot which allows for a full featured music experience by allowing the user to carry a personal music library. This is really only possible with expandable memory.

"Voice commoditization and falling voice ARPU are driving a shift in wireless operators to focus on data revenue models and services," according to Frank Dickson, Chief Research Officer for MultiMedia Intelligence. "Music has been the first 'killer app' 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 personalize their handsets as a way to enhance ARPUs. Music companies discovered a way to sell a form of music which was less susceptible to piracy and provides incremental revenue."

However, 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 recently launched Verizon Wireless Juke, manufactured by Samsung, has a swivel design which enables it to open 180 degrees to reveal the keypad. It features 2 GB of internal storage that complements the phone's music player, which supports .mp3, .wma and unprotected .aac files. Other features include VGA camera with Nightshot, Bluetooth stereo support for listening to music and the ability to access Verizon Wireless' popular services such as VZ NavigatorSM and ChaperoneSM.

Another recent handset introduction, the Sony Ericsson W910i Walkman phone capitalizes on the Walkman brand and is targeted as a "portable music device." The SensMe feature picks songs or creates a playlist by mood. To randomly select a song, the user only needs to flick of the wrist and use "Shake control." The device features a 262, 44 color TFT, 240x320 pixel display and Memory Stick Micro support (up to 4 GB) with 35 MB of internal memory.

MultiMedia Intelligence's new research report, "Wanted: Multimedia Handsets—Consumer Desires Meet Operators ARPU Needs" 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. The report begins by looking at the wireless industry trends that are driving the need for feature rich handsets. It then looks at basic
multimedia handsets and their growth. It turns its attention to feature rich multimedia handsets, including the technology driving them, and unit forecasts and revenue outlook. Finally, it examines and forecasts handsets with specific multimedia features.

About MultiMedia Intelligence

MultiMedia Intelligence provides actionable intelligence on the markets and technologies for delivering IP video to the Nth screen. With a broad "ecosystem-based" perspective that moves beyond the classic 'three screens' of TVs, mobile handsets, and computers, we identify the opportunities in enabling and monetizing digital media on a multi-platform, multi-network basis.