TELECOM Digest OnLine - Sorted: Mobile Music Buys May Bring Meager Carrier Profit

Mobile Music Buys May Bring Meager Carrier Profit

Monty Solomon (monty@roscom.com)
Wed, 7 Sep 2005 10:12:41 -0400

By Sinead Carew | September 7, 2005

NEW YORK (Reuters) - Cell phones may become the new way for the iPod
masses to download and listen to music in the coming years, but
wireless companies may not see much of a boost to their profits from
selling such services.

The biggest U.S. mobile service companies are considering selling
phones that can play songs and some have plans to deliver music to
phones over the wireless airwaves, in a bid to boost revenue as phone
call prices drop.

Analysts expect Cingular Wireless, the biggest U.S. mobile service, to
reveal plans on Wednesday to sell a new Motorola Inc. <MOT.N> phone
that comes with iTunes, the music store software from Apple Computer
Inc.<AAPL.O>, whose iPod player dominates the portable digital music
market.

At least initially, Cingular is expected to let users transfer songs
to the phone from computers rather than through wireless download
services.

POOR PROFIT MARGINS FOR SONGS

Despite all the excitement about wireless song purchases, such mobile
music is likely to deliver much poorer profit margins than wireless
carriers are used to from phone calls or other services such as
ringtones, one analyst said.

http://www.boston.com/business/technology/articles/2005/09/07/mobile_music_buys_may_bring_meager_carrier_profit/

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