Mobile Music

Music-enabled phone sales jump in Q2

Jason Ankeny — Mon, 25 Aug 2008 18:49:53 -0400

Sixty-five percent of phones purchased in the second quarter 2008 were music-enabled, compared to 45 percent of handset sales a year ago, according to a new report by market research firm The NPD Group. On the whole, however, mobile phone sales declined in Q2, totaling 28 million units, off 13 percent year-over-year. NPD estimates total second quarter sales approached $2.4 billion, down 2 percent since Q2 last year. Motorola's unit-sales share fell from 27 percent in Q1 to 21 percent, and while the manufacturer remains atop the U.S. market, both LG and Samsung are closing in, with 20 percent unit-sales shares each.

NPD adds that phones sold in the second quarter were typically more feature-rich than those sold the year prior, continuing a trend from previous quarters; handsets boasting QWERTY keyboards experienced the most impressive year-over-year rise, accounting for 28 percent of handsets sold in Q2 2008, compared to just 12 percent a year earlier. Smartphone sales represented 19 percent of all mobile phone sales in Q2, up 9 percentage points over a year ago--in addition, 81 percent of phones purchased were Bluetooth enabled, up from 69 percent last year.

For more on the NPD report:
- read this release

Related article:
Study: Mobile consumers demand cameras, multimedia

Sony Ericsson tunes up trio of new Walkman phones

Jason Ankeny — Mon, 28 Jul 2008 19:26:23 -0400

Sony Ericsson announced three new Walkman music phones and related accessories, promising superior sound quality as well as a range of new multimedia features. The new W902 Walkman boasts capacity for 8,000 songs as well as a five megapixel camera and video capturing and sharing capabilities, while the W595 Walkman stores more than 1,900 songs for playback via built-in stereo speakers, complete with sharing across a series of Bluetooth wireless speakers. The W302 Walkman targets more general audiences, offering a two megapixel camera, FM radio and the TrackID music recognition application. Sony Ericsson also touted new mobile apps like SensMe, which matches a user's mood to music, and Shake, which enables users to change tracks with a flick of the wrist. All three Walkman models will be available in selected markets by the end of 2008.

For more on the new Walkman phones:
- see this slideshow of the Walkman phones
- read this release

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U.S. Cellular's strategic BREW plan: improving discoverability

Thu, 29 May 2008 09:20:11 -0400

A commitment to quality and customer service may sound cliché, but regional operator U.S. Cellular has crafted its entire mobile business around these concepts, from the significant networks investments it makes to paying careful attention to the customer-oriented people it hires to the BREW data applications it serves up to its customers.

Considered a super-regional operator, Chicago-based U.S. Cellular supports more than 6 million customers in 26 states primarily in the Midwest, New England and Pacific Northwest. In a market characterized by rapid innovation and delivery in the wireless data application realm, U.S. Cellular is surprisingly slow to the punch, and that's okay with its executives.

"Our focus is not on speed, but experience," said Joe Settimi, director of product strategy and development with U.S. Cellular, a company that took some 15 months to evaluate BREW back in 2002. "We are much more selective about the content applications we put on our deck. It may frustrate developers, but our customers love it. There is a level of trust built up, and we don't want to destroy that."

According to Settimi, this slower approach has resulted is some BREW-based services and applications that have had a significant impact on uptake of the operator's easyedge data services. Last year, U.S. Cellular worked with Napster, Qualcomm and Motorola to implement Napster to Go service, putting significant emphasis on application usability. That meant that users needed to have an out-of-box user experience with mobile music.

"Historically in wireless, music is an afterthought," Settimi said. "You get home and realize you have to buy all of these extra things. We made sure to package them all together. That drove the customer experience, and Napster raved about how many of our customers used the applications."

U.S. Cellular also worked with developer Asurion to tailor a popular application called My Contacts Backup, which is offered to customers for free. The application automatically protects contact information stored in a user's mobile phone and enables them to transfer the information to a new handset or remotely erase them if the phone is lost or stolen. The tool combines a downloadable handset application with a Web-based contact management portal to provide automatic or manual contact backup options. When customers replace their devices, they need only login to the application and it automatically restores the contact list to the new phone.

When it comes to ringtones, U.S. Cellular consolidated all of its ringtone application providers onto one Web site called Tone Room. From there, customers can preview and send ringtones directly to their handsets using BREW-directed SMS to wake up the application on the phone and deliver the ringtone. Users can also purchase ringtones directly from their phones.

For sure, BREW services have seen tremendous growth on U.S. Cellular's network, although the company declines to give any statistics regarding BREW-related growth and ARPU due to competitive reasons. In 2007 alone, data revenues increased 69.1 percent, to $367.6 million.

"BREW services have seen fantastic growth as more customers become aware and see the value these applications provide," Settimi said. "We have also seen tremendous growth across all data products, including text, pics and SMS."

While ringtones, games and wall paper represent the largest growth areas in BREW for U.S. Cellular, the popularity of Web browsing has increased significantly within the last eight months, despite the fact that the operator has offered a Web browser since 2003. Settimi attributes the phenomenon to the introduction of Apple's iPhone.

"A lot of carriers in the past have not advertised around a product, and the iPhone was advertised around a product. People got to see a close-up of the screen and the browser working. Those things have helped drive awareness," Settimi said.

Now that every U.S. Cellular device has BREW included on it and the operator has tapped deeper into its subscriber base with easyedge services, the next goal is to improve discoverability of content to increase usage even more.

"We have certainly been trying to make some concerted efforts around discoverability during the last six months," Settimi said. "Carriers have had limited the adoption by launching services with poor usability. We know he or she may never try applications again if they have a bad experience."

The operator is improving discoverability multiple ways. One method includes preloading applications on devices. When a customer opens the box and activates the phone, an application is readily available on the home screen, helping to drive awareness of BREW applications.

Enabling mobile search across devices is another significant way to drive data usage, Settimi said. No matter how well organized an application catalogue is, end users still find it difficult to find the application they desire. Mobile search only requires a customer to click on a search application and type in the type of content or application they are looking for, whether it's typing in the word "email" or "Cold Play" to obtain music from that band.

U.S. Cellular is also tying applications to the Web interface where applicable. That means if a customer enters the operator's mShop on-device shopping portal, for instance, and clicks on "games" then appropriate advertising banners would display more popular games that would take the customer directly to the advertised game without having to wade through the deck.

U.S. Cellular executives will be presenting many of these ideas at this week's BREW 2008 conference during a session titled: "Leveraging the BREW Platform: Examples from U.S. Cellular" on Thursday, May 29, from 1:30 to 2:30 p.m.

Mobile gaming: turning enthusiasm into revenues

Wed, 28 May 2008 16:41:47 -0400

By Mark Donovan

The mobile industry isn't all fun and games. But gaming remains the most popular form of entertainment among U.S. mobile phone owners. M:Metrics MobiLens research found that more than 20 percent of mobile subscribers reported playing a game on their phone in March 2008. This compares to 7 percent who used their phone to listen to music and the nearly 6 percent who watched video on their third (or is that their fourth?) screen.

It seems clear that Internet-based services that stitch together people's online and mobile lifestyles are a winning proposition, but the current audience using their mobile browser to access news, information and entertainment online stands at less than 14 percent.

With one in every five mobile subscribers playing games, it's no wonder that nearly 150 game publishers are vying for their attention. But those publishers who make games-and the operators and direct-to-consumer aggregators who merchandise them-don't have an easy task in turning this general enthusiasm for mobile gaming into growing revenue streams: Usage among most gamers tends to be irregular, often doesn't involve a game purchases, and sales continue to flow primarily to the few titles. It's a challenge for publishers to rise above the noise inherent in large catalogs and crowded decks.

It's useful to put mobile game usage in the context of other popular mobile services. Mobile phones remain predominantly about person-to-person communication and so it's not surprising that over half of people who send text messages and 44 percent of those who send mobile email do so almost every day. Perhaps more surprising, though, is that nearly one-third of those relying on their mobile browser or applications for news, information and entertainment do so almost every day while more than 25 percent of mobile music consumers get a music fix on their phone almost daily. In contrast, just 21 percent of mobile gamers play their games almost every day and fully half play games only one to three times in a given month.

Don't take those data points as evidence of a gloomy market outlook. Current realities aren't dim so much as they are complicated. From March 2007 to March 2008, the audience of mobile game downloaders grew 17 percent, nearly twice as fast as the overall U.S. market. Developers gathered for BREW 2008 will be happy to know that game downloaders on Verizon Wireless increased by 21 percent over the same period.

This audience growth is encouraging but needs to be tempered by the fact that the number of consumers purchasing games grew with the market. So more people are downloading games but a roughly the same percent are purchasing them. The growth in the audience of mobile game downloaders is not proportionately increasing the number of mobile games purchasers, but this doesn't mean that revenue from mobile games is not increasing. Earnings results reported in May 2008 by Electronic Arts and Glu Mobile, the clearest barometers of the industry, show revenue growth. What's going on? There is a shift in the business model.

In April 2007, less than half of the mobile games inventory available on carrier decks was offered on a subscription model. A year later, 61 percent of titles were available under a recurring billing model, usually a monthly fee. This steady move to a recurring revenue model is a boon to the sector, though a glance at the ringtone market urges caution if you're building a business based on a breakage model.

As I write this, consumers in the United States have nearly 1,400 mobile games from which to choose. Mobile gaming remains at the core of carrier-promoted services. In April, Verizon Wireless customers had more than 300 games to choose from while customers of rival AT&T Mobility had nearly 600 titles from which to pick; games continue to represent the largest collection of downloadable applications in any category.

While this robust inventory creates lots of consumer choice, this vast selection poses a challenge for consumers wishing to discover new content. That's a lot of choice to wade through on that tiny screen. Most consumers don't wade, they select what's most prominent, and here we can clearly see the challenge faced by publishers who are not on the A list. Strike that: Not on the A+ list.

In the month of March, the period for which M:Metrics has the most recent data, the top ten titles accounted for 20 percent of game purchases. Put another way, about 1 percent of the inventory accounted for one in every five purchases, a statistic that makes the 80/20 rule look magnanimous.

Mobile games-like movies, music, and console gaming-remains a hit driven business and this is true whether we're looking at the success of GTA4 or mobile Tetris. In many ways this characteristics of the sector is a self-fulfilling prophecy since carrier merchandising tends to reinforce hits, making it difficult for a naïve consumer to ever discover what's lurking beyond the first page or so of the deck.

Once more BREW developers can take some solace. While the top five game publishers command a 62 percent share of premium placement on AT&T decks and a 75 percent share at Sprint, they account for less than half of the premium promotional slots on Verizon Wireless.

This much is clear: Mobile phone owners like to play games, have a vast selection to choose from, have increasingly capable devices that improve the gaming experience, and are downloading them in record numbers. But the limited ability of consumers to discover titles outside of the hits-or at least those promoted as such-is a throttle on market growth.

Consumers are spending more money than ever before on mobile games, but this rising tide is not lifting all boats. That might just be market forces, or perhaps it's a function of a merchandising ecosystem that needs improvement. Did I mention it's complicated?

Mark Donovan is the chief marketing officer and senior analyst at mobile media measurement firm M:Metrics.

AT&T, LG turn spotlight on Shine

Tue, 27 Nov 2007 06:59:57 -0500

AT&T and LG Electronics announced the release of the handset maker's new Shine, a multimedia, sliding form-factor device boasting a sleek silver exterior. The LG Shine also features a 2 megapixel camera, a 2.2-inch LCD display, microSD storage for up to 4 GB of music, images and video, and 70 MB of integrated user memory--the device arrives pre-loaded with features including AT&T Video Share, Mobile Banking and AT&T Mobile Music (with support for MP3, WMA, AAC, AAC+ and eACC formats). Price tag: $149.99.

For more on the LG Shine:
-read this release

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Microsoft closing in on Musiwave acquisition

Tue, 13 Nov 2007 06:59:58 -0500

Microsoft announced it entered an exclusivity agreement to acquire white-label mobile music entertainment services provider Musiwave. According to Microsoft, the Openwave-owned company's relationships with record labels, device makers and mobile operators would ideally complement the software giant's Connected Entertainment technologies and services like Windows Mobile, Zune, MSN and Windows Live. "Microsoft and Musiwave share the same philosophy in working with hardware and mobile operator partners to deliver great experiences for mobile device users," said Microsoft's Mobile Communications Business senior VP Pieter Knook in a prepared statement. "Bringing Musiwave on board would provide an opportunity for Microsoft to explore new areas in the mobile space previously untapped, and to showcase the power of software plus services. This contemplated acquisition reflects Microsoft's recognition of the software and technology expertise in Europe."

For more on the pending Microsoft/Musiwave deal:
- read this release

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Just how new is the new Nokia?

Tue, 02 Oct 2007 06:59:59 -0400

Nokia's extreme makeover forges on. On Monday, the company announced its biggest acquisition to date, purchasing navigation software developer Navteq for $8.1 billion and continuing (but almost certainly not completing) its transformation from handset giant to mobile multimedia force. Nokia has dominated headlines for months now, in rapid succession debuting a mobile music download service, re-introducing its N-Gage mobile gaming platform, launching its Mosh mobile social network and purchasing mobile advertising provider Enpocket. Most notably, Nokia rolled out Ovi, a new Internet services brand that promises to tie it all together. Virtually overnight, it is a new and different company, with more scope and reach than ever before.

The question facing Nokia as it evolves is whether its new services will support its core hardware business or whether its hardware will instead exist to serve its multimedia aspirations. In light of rumors that Google will market its forthcoming gPhone device for under $100, subsidizing budget-priced monthly subscriber fees via mobile advertising revenues, the economics of the handset market are facing a radical shakeup. The pieces of the puzzle are clearly in place for Nokia to pursue a similar direction and slash handset prices in the name of advertising and service revenues. A wholesale metamorphosis of Nokia's business identity seems like a long shot, of course, but unlike traditional rivals including Motorola, Samsung and Sony Ericsson, the company is uniquely positioned to face the challenges of a mobile marketplace where non-traditional players like Google and Apple now threaten to call all the shots.

A new advertising campaign touting Nokia's N-series range proclaims the devices "Open to anything," an obvious jab at Apple's locked-down iPhone. If Nokia is as open-minded as the ad suggests, things are about to get very interesting. -Jason

QUICKLINKS: VC firm 3i exits mobile market; Adobe webinar: Flash Lite vs. J2ME; Much more...

Mon, 19 Feb 2007 19:01:35 -0500

UK-based investment firm 3i walks away from mobile. Blog

Adobe web seminar on Flash Lite vs. J2ME. Blog

YouTube blocks TinyTube, the mobile transcoder site. Blog

UIQ Technology releases UIQ 3.1 for Symbian OS 9.2

This is Mobility has a 3GSM wrap-up. Blog

THQ's 2007 release list. Blog

Universal Music UK signs deal for off-portal mobile music site. Blog

The top 10 "iPhone killers." Blog

Google Mobile transcoder adds RSS support. Blog

Sling Media to support WM6. Blog

Opera 9: is the world ready for an ACID2-compliant mobile browser? Screenshot

Cert improvements in WM6. Blog

QUICKLINKS: Mobile web business plan competition; Opera Mini 3.0 beta review ; Much more...

Mon, 06 Nov 2006 19:01:35 -0500

Mobile web business plan competition. Blog

Here we go again: NTP sues Palm for patent infringement. Article

Review: Opera Mini 3.0 beta. Blog

Enpocket scores $2 million in funding. Blog

Ads in ringtones?! What'll they think of next? Blog

Report: Mobile blogging more hype than substance. FierceMobileContent

Windows Communication Foundation (Compact Edition) and the story of the Lunch Launcher. Blog

Report: Twice as many music phones as MP3 players. FierceMobileContent

BlackBerry Pearl targets consumers

Mon, 11 Sep 2006 20:01:37 -0400

The BlackBerry Pearl is a great indication of RIM's desire to diversify its customer base. The Pearl is the first BlackBerry to include a camera and an MP3 player. The phone will launch on T-Mobile later this month and is expected to cost about $200. Article