Not Much Call for Cell Phone Gadgets

The Chicago Tribune writes that although "mobile phones have all sorts of bells and whistles, including models that play videos and download music...customers appear happier using their phones to do old-fashioned things, like making a call."

The article cites Verizon dropping its $15 monthly fee to access music and Forrester Research's recent survey that "shows only 6 percent of mobile phone subscribers download or stream music files once a week while only 3 percent of customers do the same with video services. That compares to 38 percent of customers who say they send a text or picture message."

Charles Golvin at Forrester said Verizon is "acknowledging that the monthly fee is a barrier to experimentation. Phones continue to be communication devices."

According to Verizon, more mobile "downloads have come over the air to a consumer's phone, even though it costs $1 more" than via the PC. Julie Ask at Jupiter Research said, "The price disparity reflects that people are experimenting. The reality is that most of the music I want to put on my phone is what I already own,. A small portion of that music is bought from a carrier."

Regarding the potential for mobile video, Ask noted that "people don't have large video collections they tote around," and "most people so far don't see the value in watching video clips on a 2-inch screen." Ask pointed out that "only 1 percent of mobile customers watch video on their phones, and that figure is expected to rise to only 5 percent by 2010."

Ask said, "Prices have to start to come down to attract more users. They are not interested right now."

Verizon believes it's new pricing approach and the launch of the LG 'Chocolate' handset will help. Forrester's Golvin thought "Verizon might be on the right track." He said, "All the carriers need to provide some sort of freebie period to get people hooked."