Music phones to slice into iPod growth

Reuters.co.uk writes that music handsets might pose "the biggest threat to Apple Computer's iPod and the portable music player industry." Music cellphone sales are rising and handset manufacturers are hoping they will hope drive new growth.

Peter King at Strategy Analytics said, "The music phone is not going to significantly impact the high-end, high-capacity hard disk market but it will certainly have a major impact on the low-end flash market." He estimated "sales of phones equipped with MP3 music players will balloon to 796 million in 2010, accounting for three-quarters of all handsets sold, from 94 million this year," while the market "for stand-alone digital music players, should triple to 176 million units from 58 million."

The big question is whether consumers are willing to pay extra for a handset with a suitable amount of internal storage/memory and only want to deal with one device.

Claudio Checchia at IDC Asia Pacific said, "In Asia, there is a huge status symbol with the mobile phone where folks don't really think twice about spending $500 or $600 to buy the latest mobile phone but are not willing to spend $200 or $300 for an MP3 player."

The article noted Apple is porbably not sitting still. Kirk Yang at Citigroup's Asia Pacific opined that a "iPod with phone functionality is going to be a category killer."