Will the iPhone do for mobile music what iTunes did for online music?

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Media analyst Screen Digest has completed some interesting research into the global market for over-the-air (OTA) mobile music downloads, as well as speculating on what impact the iPhone may have on this market.

By the end of 2006, the global market for OTA mobile music was worth around £113m, most of which was generated by single track downloads in the US. The global online music download market was worth around £636m.

By 2012, Screen Digest forecast the global mobile music market will be worth over £1bn, the vast majority thanks to consumers in Japan and South Korea. The reasoning for this is primarily due to vastly superior mobile networks in those countries than European and US citizens have the luxury of. For this reason, Western consumers prefer to download music onto their PCs over higher speed broadband connections, and then synchronise with their music devices / phones.

Screen Digest forecast that subscription-based music services will emerge over the next three years, and account for two-thirds of total mobile music revenues worldwide by 2012. Something that Steve Jobs may want to take note of, as he has hinted at being interested in subscription music services, while saying Apple won’t launch such a service at other times.

Screen Digest digital music specialist Dan Cryan says: “This is a really exciting time for mobile music and industry players are jostling to enter a rapidly growing market with the right products and business models. On the one hand we have Apple’s iPhone, the first generation of which doesn’t lend itself it to over-the-air music downloads.”

I’d question his belief that the first generation iPhone doesn’t lend itself to OTA music downloads. Though it’s likely that most people, particularly on slower mobile networks in the US, will upload music to their iPhone via iTunes on their Mac or PC (as per iPod) the inbuilt Wi-Fi—plus the possibility of a 3G international version of the iPhone—means that OTA downloading of tracks straight to the iPhone should easily be possible with a tweaked version of iTunes.

With many predicting that the iPhone will revolutionise the mobile industry, could it do for mobile music what iTunes has done for online music?

Ironically, it will be iTunes that underpins music on the iPhone, so in reality it will be the software that needs to change to facilitate a successful iPhone experience.

Will Apple listen to a potential wave of new customers, perhaps including a number who haven’t used iTunes before?

Will the lure of a piece of the potentially lucrative subscription-based music download service tempt Jobs (or any successor) to offer such a service to iPhone/iPod users?

Only time will tell, but it’s in the area of portable music devices and accompanying software that Apple has, arguably, made its biggest mark amongst general consumers. Apple likes to set trends. How will the iPhone shape mobile music, or will mobile music shape future generations of iPhone?

Andy Merrett