Wednesday, July 12, 2006

Music Phones Tackle the iPod in Europe

BusinessWeek writes that music playing handsets are starting to encroach on Apple's (AAPL) iPod dominance in Europe. The article cites data from Gartner that in "Britain about 8% of all adults listen to music stored on their phones, vs. 17% who listen to music on an iPod or other dedicated music player."

However with more handsets gaining higher capcity storage, many believe "it's inevitable that they will chip away at the middle and lower ends of the market for digital music players."

Regarding the music efforts of European network operators, Daren Siddall at Gartner said, "The service-providers have to look for new revenue streams. Entertainment is clearly high up there."

On the topic of pricing for full music downloads over the air, Ovum analyst Michele Mackenzie said, "The price has been set by Apple and it's been set very low, so the margins are very slim."